Kate Hoey: The Minister should be aware that one of the lessons from the sports action zones is that a bottom-up, not a top-down approach works. When the approach in our area was top down for the first two years, with Sport England trying to run it, it did not work. When it was bottom up, with genuine neighbourhood support from community groups, the South Bank employers group and all the people who lived there and knew what they needed, it worked. Does the Minister agree that it is important that the funding continues and is not diluted in a London sports board, thus getting broken up, and therefore not necessarily used for inner-city areas such as mine?

Andrew Miller: I am extremely grateful for the work that English Heritage is doing in the north-west, particularly in supporting work in my constituency to look after the grade II* listed buildings on the Hooton aerodrome? One of the problems that has emerged is the shortage of money to repair buildings, and the resultant tendency for preference to be given to grand mansions rather than our industrial heritage? Can my right hon. Friend use her Department's offices to work with English Heritage to try to gear in private sector money to help buildings for which alternative uses could be found to succeed in the future?

Estelle Morris: Yes; my hon. Friend has a particular interest in this issue, given his constituency, and I pay tribute to the work that he does. There is no doubt that English Heritage has re-organised its education service in the past few years. Change is always unsettling and leads to some lack of certainty, but I am pleased to say that the money that English Heritage is putting into education has increased. Indeed, a lot of money has gone into front-line services, so that more people with different skills are working with children. In addition, and as my hon. Friend knows, our Department and the Department for Education and Skills have been working closely with English Heritage to ensure that the quality and shape of its education service is as effective as it can be. I suspect that, over the next few years, as the new proposals bed down, my hon. Friend will see that education services in his constituency, and, indeed, throughout the country, will improve in quality.

Chris Bryant: The Minister will know that there has been much talk of a bid to the Heritage Lottery Fund from the commercial west end theatre owners to try to refurbish some of the most beautiful buildings that we have in London, which are one of the major reasons why many tourists come to this country. Does she believe that it would suitable to give £125 million to bring those theatres into the modern era, so long as we can ensure transparency in how that money is spent and decent access for ordinary people to go to those theatres?

Martin O'Neill: On a point of order, Mr. Speaker. Is it in order for a Member of this House to enter the constituency of another Member to accompany a Member of the European Parliament on what is called "a mobile surgery"? The hon. Member for Perth (Annabelle Ewing) is, as we speak, in my constituency to be, as she said to the Alloa Advertiser on 17 March,
	"on hand . . . to deal with issues that are decided in the House of Commons."
	I did not contact the hon. Lady, although she sent me an e-mail at 8 o'clock this morning to tell me that she was going to be in my constituency. As she is a candidate for the new Ochil and South Perthshire constituency, this is not news to me, but what is news to me is that she is assuming that she can participate in surgeries in my constituency. As I understand it, the election has not been called, Parliament has not been dissolved and, although I am standing down, I am still the hon. Member for Ochil, with an office and a programme of surgeries that will stretch at least into the month of April and perhaps beyond.
	I have been in this House for as long as you, Mr. Speaker, and I have never encountered anything like this during those 25 years or more or in the six general elections in which I have fought. Is this a point of order that I am raising or am I merely drawing your attention to an act of gross discourtesy?

Oona King: I beg to move,
	That leave be given to bring in a Bill to impose a duty on local authorities to provide youth services and establish local partnerships to promote youth participation and engagement; and to make other provision in connection with the reduction of youth crime
	It is of great importance to my constituents and me that I am able to introduce the Youth Disorder and Engagement Bill. In July 2003, I organised a meeting for 150 local constituents to meet the previous Home Secretary and to discuss ways of tackling youth disorder, which is a hugely important issue to me. Local residents were in touch with me every day, as they were worried about vandalism, arson, graffiti and intimidation by groups of youths. The meeting attracted a wide range of residents both young and old from all ethnic groups.
	Consensus was reached about the two approaches required. First, as Members would expect, people wanted more police on the streets. Since then, I have circulated questionnaires, held local meetings, secured an Adjournment debate, and listened to constituents on the doorstep and in my surgeries. All the consultation convinced me that the initial consensus was correct—everyone wants to be able to walk down the street without fear, and no one wants graffiti, arson and gang fights. The way to achieve that is through a combination of more police and better youth services. We have all heard requests for police, but I hear fewer requests for better youth services. We now have more police. Since 1997, there has been an increase in Tower Hamlets alone of 43 per cent. or 200 new police officers. We have safer neighbourhoods teams, and every area of my borough will have its own team of police officers by July this year. Tower Hamlets will be the first authority in the country to roll that programme out to ensure that residents feel safer.
	The safer neighbourhoods programme is delivering exactly the sort of community policing that my constituents were asking for, and we have already experienced a drop in crime. In the past year, crime in Tower Hamlets fell by 5 per cent., and in one of the first neighbourhoods to have a safer neighbourhoods police team it fell by 15 per cent. That programme is clearly working, but what about youth services? Consultation with residents led directly to this Youth Disorder and Engagement Bill, which is intended to make sure that every borough takes responsibility for providing youth services. It is a scandal that such an important area of service provision is not a statutory duty, and it is now time to crack down on antisocial local authorities that do not take young people's needs seriously.
	Youth services must be good quality, and must work as a partnership, which means setting strategy locally with all the stakeholders, including the police, the education authority, Connexions, the voluntary sector, parents and young people themselves. Most importantly, youth services must reach the hard-to-reach—kids who have dropped out of education, kids who have been in prison, kids who have recently settled in the UK and, of course, girls. In the past, most youth services have predominantly attracted young men, not young women. Youth services must be both creative and preventive. Kids should have the chance to develop skills and enjoy leisure activities, but intensive work must be undertaken with vulnerable children and those most at risk of offending.
	Not many things in Tower Hamlets are getting worse, but I would be kidding if I said that everything was fine. Two years on from the last time I took 150 residents to meet the Home Secretary, we still have graffiti—my house was done last weekend—vandalism and gangs of youths hanging out on the streets. But let us consider some of the issues that those young people face, and some ideas about how the Bill could help local authorities develop good youth services.
	Tower Hamlets has almost 20,000 young people between the ages of 13 and 19. Fifty per cent. of the community in Tower Hamlets is white, but 60 per cent. of pupils are of Bangladeshi origin and many live in poor quality, overcrowded housing. Our overcrowding rate is four times the national average. Many families are on low incomes. I imagine that in most constituencies there are areas where the majority of pupils are not entitled to free school meals—in Tower Hamlets 60 per cent. of children are entitled to free school meals.
	Tower Hamlets youth services are rising to the challenge, but even Tower Hamlets council has said that although the youth service has performed well, it has not been well regarded. I shall mention aspects of the service that have worked well. One is the rapid response team, which was set up to deal with gang violence, to defuse incidents and to bring a youth work response to antisocial behaviour. The team provides street-based youth work, three mobile youth work vans and early intervention work in schools.
	Let me give an example of one young person, Tony, who had already been involved in gang violence when he met the rapid response team. He was sent to a young offenders institution at 16, after being found guilty of grievous bodily harm, and his probation officer referred him to the RRT. He was given one-to-one support to help avoid a return to his problems and to get appropriate training. He is now on a modern apprenticeship course and works with the rapid response team to help other young people get out of the conflict situations they have been in.
	Another example is Asad, who had dropped out of school and felt that the new start initiative was his first real chance to express himself and develop his own choices. He was supported into volunteering as a youth worker and has finally started a degree in youth and community work at Greenwich university. He said, "Lots of my friends were getting into all sorts of trouble. I thought I was heading the same way, but meeting the new start team and trusting them has given me the chance to leave that life behind."
	We need to ensure kids like that are given the chance to fulfil their potential. This Bill is the first step towards giving every young person the chance to overcome setbacks, disaffection, violence and, in the case of the young people I described, deprivation. The Bill would give them the chance to walk down the street and be welcomed as a force for good, as Tony now is, not feared as part of a youth problem. The Bill is the next step towards bringing back confidence on the streets for all of us.
	In July 2003, 150 people from Bethnal Green and Bow came to Westminster. Tonight another 150 people from my constituency are coming here to meet the new Home Secretary and to discuss the next steps in tackling antisocial behaviour. I am sure my right hon. Friend will listen to what we have to say. I am delighted that my right hon. Friend the Secretary of State for Education and Skills, who is a Tower Hamlets resident herself, is present in the Chamber. I look forward to the time when we ensure that excellent youth services are part of the solution to the problem of youth disorder. I therefore request that leave be given to introduce the Bill.
	Question put and agreed to.
	Bill ordered to be brought in by Ms Oona King, Mr. Bob Blizzard, Ms Julia Drown, Mrs. Lorna Fitzsimons, Mr. Fabian Hamilton, Kate Hoey, Alan Keen, Tony Lloyd, Mr. Andrew Love, Ann McKechin, Mr. Andrew Miller and Joan Ruddock.

Ruth Kelly: It has increased; indeed, it has increased significantly, and I shall come to the House tomorrow to talk further about that. We are not only making unprecedented investment in skills, but making unprecedented investment in further education colleges to update and transform them to deliver the skills that this country needs.

Ruth Kelly: I am pleased to say that the hon. Gentleman, who I admire greatly, is right on the subject of synthetic phonics. We have a synthetic phonics strategy in our schools—it is called the national literacy hour. We introduced it in 1998 and its approach is now almost entirely based on synthetic phonics. Indeed, if hon. Members look at the results of the Clackmannanshire study, to which I believe the hon. Gentleman is referring, they will find that they are remarkable compared with those of control groups in Scotland that do not use synthetic phonics. However, if its results are compared with those under the national literacy strategy taught in England, the gap is not the same. He will agree with me that it is right to teach our children phonics. I want that teaching to be ever improved in our primary school system.
	It is our ambition to be the best-educated, best-trained and best-skilled country in the world. All the evidence shows that if we really want to offer children the best start in life, we must invest in the early years. That is why children and families are at the centre of our strategy. It is right that we do more to support parents and families with young children.
	The children who face the greatest challenges in learning to read and write need to be helped at an early stage. By 2008, we will be investing almost £1.8 billion in Sure Start, thus doubling the funding available now. Over the next five years, early years will become a fundamental part of the welfare state which will be able to respond to the varied needs of children and families. By 2010, we will extend from 500 to 3,500 the number of Sure Start children's centres, so there will be one in every community offering information, health care, family support, child care and other services. We will extend the free early education entitlement for all three and four-year-olds to 15 hours a week, thus working towards our goal of 20 hours a week.
	We must continue to invest in our schools and to reform them so that we drive standards ever higher, promote good behaviour and widen opportunity. All parents have the right to have their children educated in modern facilities and orderly classrooms with strong discipline and good standards of teaching. We now have more teachers than before, with more than 28,000 recruited since 1997. There are now 105,000 more support staff in our schools.
	The standards of teaching are better than ever before. Our children are gaining the best results ever at age 11, GCSE and A-level. Those results compare with the best in the world, but we must go further. Some 78 per cent. of 11-year-olds achieve level 4 in English and 74 per cent. gain level 4 in maths, but we know that the chance of children achieving five good GCSEs is almost seven times higher if they reach those expected standards. We must support teachers in driving standards ever higher. To do that, we need to focus on the needs of every child and have first-rate places in which children can learn. Last week, the Chancellor announced the 15-year programme to rebuild or refurbish all our secondary schools to world-class standards. He said that that strategy would be extended to all our primary schools.
	For those children who have not reached the expected standard in literacy and numeracy by the end of their primary school education, we will continue to place a relentless focus on the basics at secondary school, thus ensuring that every child who leaves school is equipped with functional English and maths for work and for life.

Ruth Kelly: My hon. Friend always makes serious points and he is right to raise that one. We know that healthy meals promote good standards of behaviour and that children achieve more when they are fed healthy food. That is why we have recently been talking about the new school foods trust that we are setting up and how we can make change happen in our schools so that all children have the chance to eat a healthy meal. I shall present more details of our proposal in the next few weeks.
	I want every secondary school to be part of a network of schools by September 2007. We must focus our efforts on those schools that are found by Ofsted to have unsatisfactory behaviour. That is why I recently announced that local authorities would draw up urgent action plans to support the schools identified by Ofsted as being in that category, backed up by return visits from Ofsted within a year to check on progress and ensure that improvement is under way.
	Through increased and sustained investment in information and communications technology, we also ensure that learning is tailored closely to each young person's needs and circumstances, including the facility to learn from home when necessary. Strong, autonomous schools, closely linked to home and each other, with a strong sense of mission and purpose, will transform opportunities for our children. If all young people are to make the most of their skills and talents, it is crucial to give every young person the opportunity and encouragement to stay in learning until they are at least 18. Far too many young people drop out of school at 16 or 17. Our participation rate at the age of 17 is one of the worst in the industrialised world.
	The White Paper on 14 to 19-year-olds, which was published last month, outlines our proposals to build on the current system of GCSEs and A-levels to enable all our young people to combine practical, work-based learning with traditional, academic learning in the classroom. In future, children will learn the subjects that they enjoy at their own pace in places that motivate them.

Ruth Kelly: I completely agree with my hon. Friend. What is more, all the evidence shows that if we get the early years right, and if children start school ready to learn at the age of five, it has an impact on their performance at school right through primary school. The Sure Start system works best when parents feel that they have control and ownership of the courses in the Sure Start programme which they can attend while their children are learning and playing. In some Sure Start programmes, we have seen really innovative learning programmes, involving dads and books, for example, and mums learning to cook—to come back to the point made by my hon. Friend the Member for Luton, North (Mr. Hopkins). The scheme presents a huge opportunity to make a lasting difference not only to children but to their parents.
	We recognise that, when a child reaches the age of 14, there are sometimes financial barriers to their participating in education, particularly for those from lower-income households. That is why we are rolling out education maintenance allowances nationally. They will play a significant role in widening access to further and higher education by encouraging more young people from lower-income backgrounds to enter academic or vocational post-compulsory education. More than 290,000 young people have enrolled for education maintenance allowances under the national scheme so far.

Ruth Kelly: The hon. Gentleman will know that we are reintroducing grants for the poorest students, abolishing up-front fees and ensuring that students will not have to pay a penny while they are learning. I hope that he also took note of the study recently produced by the Institute for Fiscal Studies, which said that students will be £1.5 billion better off under the Government's programme than they would be under the one proposed by the Opposition.
	As a result of the Budget, we will be able to offer an extra 20,000 opportunities in pilot areas from 2006–07 for disaffected 14 to 16-year-olds, either at work, in college or with the voluntary sector. In 1997, as we emerged from the Conservative years, there were just 75,000 apprenticeships. By 2008, 300,000 young people will be in apprenticeship training. We also want to ensure that the 150,000 16 and 17-year-olds in the United Kingdom who are in employment with no training improve their skills, so we will pilot new approaches to encourage those people to take up apprenticeships or other structured training. We will also pilot learning or activity agreements for those young people not currently in education, work or training. This is clear evidence of our determination that every young person should fulfil their potential through education and training. As a result, I want our participation rate at the age of 17 to rise from 75 to 90 per cent.—one of the best in the industrialised world. Every teenager must have the opportunity of a guaranteed place in sixth form, on an apprenticeship or in training.
	Tomorrow, with your permission, Mr. Speaker, I will publish the details of our second skills White Paper. Together with the proposals in the 14 to 19 White Paper, it will set out our ambition to create a skilled and competitive nation in which all adults have access to basic skills training and the opportunity to progress. It will describe the new national employer training programme, which will build on the success of employer training pilots. It will offer employers easy access to the skills solutions they need, including free training for their employees without a first full level 2 qualification. We expect the new programme to reach full capacity by 2008, when it will cover 350,000 learners in 50,000 employers.
	To achieve our ambitious plans for our 14 to 19-year-olds in skills, we need a step change in capital investment in our further education colleges. I want to see a network of strong and vibrant colleges delivering training to industry standards in modern buildings with leading-edge equipment—colleges that can respond quickly and flexibly to the needs of employers and young people; colleges that make a major contribution to the productivity of the country.
	This Government will invest £1.5 billion over the next five years to support the long-term transformation of the sector. That is the Budget choice facing the nation: continued investment and reform for the future—in early years, child care, the renewal of primary and secondary schools to world-class standards, investment and skills, and training—or a £35 billion cut in spending, which cannot but eat into education and skills.
	That is the choice facing the country. I commend this Budget to the House.

Tim Collins: I think that Members on both sides of the House would probably agree that the Secretary of State's speech was disappointingly thin, but let us begin on what I hope is a note of consensus: all Members of the House agree that schools, teachers and pupils are working very hard, and often very successfully. They are to be praised for what they do and congratulated on what they succeed in doing, despite the difficulties and challenges that they face.
	The Chancellor boasted in his Budget speech of all the extra money he has put into education. To be clear, the Conservative party does not doubt that he has put a lot of extra money in. We do not assert that it has all been wasted and we do not propose, contrary to the wholly unfounded assertions of Ministers, to do anything other than increase spending on education in general and schools in particular very strongly in coming years.
	I hope that we hear no more of the juvenile nonsense that we heard today about the absurd fiction that Conservatives plan to sack every nurse, doctor and teacher in the country. Frankly, it demeans public debate when such charges are thrown around. For the record, and for the Secretary of State's benefit, we do not intend to slaughter the firstborn either.
	There are, however, genuine problems with this Administration's education record. For example, the Select Committee has pointed out that it is often difficult to see that the Government's education proposals have been properly thought out or that they are delivering appropriate value for money. It has warned that the Government should not continue to overclaim the effect of some of their increases in expenditure.
	The Select Committee has also pointed out recently that the Government's city academies, although they are based on city technology colleges and therefore are not something with which we differ in principle, have yet—shall we put it mildly?—to prove their full successful potential.
	This very morning, a programme for international student assessment, or PISA, study indicated that investment in high technology and computers, welcome though it is, is not by any means guaranteed to produce higher outputs in terms of better exam results or a better grasp of literacy and numeracy. The Statistics Commission has again warned the Government that they should not overclaim the progress on literacy and numeracy. I am delighted that this week, unlike last, the Secretary of State seemed to heed that warning. The National Audit Office, no less, has pointed out that the Government have spent £885 million on anti-truancy initiatives without making any progress. Indeed, on the Government's figures, truancy is now one third worse than it was in 1997.
	Furthermore, calls have been issued by employer organisations, universities and others indicating increasing concern about the extent to which exams are not as robust as they ought to be. Clearly, when an A grade can be awarded in GCSE maths for 45 per cent. of the marks, or a pass mark awarded in one GCSE exam for 18 per cent., something is fundamentally wrong. This party has a strategy to reverse those problems, starting with a root and branch clear-out at the Qualifications and Curriculum Authority. The Secretary of State appears to have no answer at all beyond a vague promise to examine A-level standards again in 2008. That is simply not good enough.
	The Chancellor, in his Budget statement, used some interesting language:
	"Head teachers of a typical primary school will receive £31,000 this year, rising to £34,000 and then £36,000, a guarantee over the next three years . . . of a total of more than £100,000. Head teachers of the typical secondary school will receive £98,500 this coming year, rising to £109,000, rising then to £115,000—a guarantee over the next three years of a total of almost one third of a million pounds."—[Official Report, 16 March 2005; Vol. 432, c. 269.]
	He used the word "guarantee" twice. What does the Red Book say about those figures? On page 149, in a footnote, it states:
	"These figures are an approximation . . . however, the Government intends to revise this formula which will mean that increases in allocations to schools will be distributed differently . . . These figures should therefore be taken as a broad indication only."
	So much for a guarantee. Head teachers up and down the land feel that they have been here before, because the last time the Chancellor gave us such a Budget was in 2002, which was followed by some of the most acute financial crises for many of our schools for 10 to 15 years or more.
	We welcome the principle of additional sums being paid direct to head teachers, but we wonder why all sums are not paid direct to them, as they would be under the Conservative party's proposal to make all schools grant-maintained and to take local education authorities out of the funding process entirely.

Tim Collins: The answer is yes. Indeed, I, too, visited the Christopher Whitehead school a little while ago, and unlike the Minister for School Standards, I did not claim that only by voting for my party was there any prospect of that school getting additional funding. Since he was quoted in the local newspaper as saying that that school would only get extra funding—which it has needed for at least the past eight years of Labour Government—if Labour was re-elected, I am happy to confirm that it would of course get that money under a Conservative Government, along with a great deal more financial freedom.

Tim Collins: No, I will not give way to the hon. Gentleman again.
	If head teachers are to be trusted more and more with running their own budgets, even under the Chancellor's schemes, why are they not trusted to exercise the same professional freedom in deciding their own policies on admissions and exclusions?
	The Secretary of State referred to the national literacy strategy. She used some very interesting terminology—terminology that I think she will find herself under considerable pressure to justify in the coming weeks and months. Of course she will not be responsible for these matters in the coming months; but she will be under pressure to justify it in the coming weeks, at least. She said—I think I quote her correctly—that she believed that the national literacy strategy was "almost entirely" composed of synthetic phonics. I must tell her that that is not the view taken by a good many distinguished experts who point out that if synthetic phonics are to work, they must be used not alongside other approaches but first, fast and exclusively. How can any education system be seen as remotely satisfactory when—even according to the Government's figures, and even after the Government have dropped the pass mark—one child in four fails to reach the required standards in literacy and numeracy?
	The Secretary of State also referred to the group of young people who are not in education, employment or training. No doubt we will debate that again tomorrow. She failed to mention that the number of such people has increased, not decreased, since 1997.
	We thought that, in the light of weekend press reports, the Secretary of State might have something to say about the Government's response to Jamie Oliver's campaign for better school meals. We learned from The Observer yesterday that the Prime Minister has apparently identified that as a high priority, and has committed additional resources to it. The first thing that should be said is that no party that has been responsible for any part of education spending at national or local level in the past 20 years should be anything other than ashamed by what Jamie Oliver has discovered and publicised. It is clear that both resources and strategy have been badly wrong for many years, and they are still badly wrong today. Will the Secretary of State confirm, however, that the issue was barely mentioned in the five-year plan for education, was sidelined in the three-year spending plans, was ignored in the public service agreements, and was not mentioned in the Budget?
	It would have been helpful if the Secretary of State had been able to clarify—given that both she and the Prime Minister were quoted at great length in yesterday's and today's newspapers—whether they have identified a single penny of new money for initiatives in that regard, and where any such money would come from. When the Conservative party announces its response, very shortly, it will not take a great deal for that response to be considerably more substantive than what we have heard from the Government to date.
	The Secretary of State rightly mentioned child care. My right hon. Friend the Member for Maidenhead (Mrs. May), the shadow Secretary of State for the family, will set out our detailed proposals soon, but I shall say a few words now. The Government have a mixed record—not a record of unmitigated failure, but not one of unmitigated success either. There has been a genuine and substantial increase in the number of state-funded places available in nursery education and child care places for very young children.
	For that reason, I am happy to confirm again that we will preserve and improve Sure Start, and will not abolish or cut it. However, since 1997 there has been a sharp decline in the number of places provided by individuals and groups that are not funded by or subject to the direction of the state. There has been something of a failure to recognise or understand that parental needs and preferences are not uniform or identical. There has been little to no research into or focus on the quality, rather than the quantity, of child care provided. In particular, there has been little analysis of why children aged 11 and above in Scandinavian countries seem to perform appreciably better than ours, even though they do not start formal education until the age of seven or later. In short, when the Chancellor announced in his Budget statement that he simply wants more years of education, rather than a focus on quality, many will have sighed with irritation rather than pleasure.
	Our priority is not to spend less on education; it is to continue to increase spending strongly, but to spend the money more wisely. We will reduce the number of administrators in the Department for Education and Skills by two thirds, transferring all the money direct to the front line in schools. We will do away with the absurdity of the Government's top-up fees scheme, which will cost the taxpayer £1.1 billion a year, in order to give universities an extra £900 million a year.

Jim Cunningham: Like my hon. Friend, I welcome the Chancellor's increases for science and technology. I am sure that he agrees that that is important for research and development in universities and industry, and for so many aspects of our economy.

Ian Gibson: I agree and I shall deal with that point in more detail to show how we can plug some of the gaps in those developments.
	I want particularly to talk about the £2.5 billion that is being put into biotechnology. One aspect of biotechnology was highlighted in the Budget speech—stem cell research. Many Labour Members, including my right hon. Friend the Secretary of State, will remember that we argued about that subject profusely, but we came up with legislation that has stood the test of time and has put Britain at the forefront of research in that field. Christopher Reeve was extremely confident about this country. Just before he died, he expressed support for our arguments and congratulated us on being well ahead of America. We do not often hear that in the fields of science, technology and engineering these days.
	There are many benefits just around the corner. The organisation that the Chancellor is setting up, to be headed by Sir John Pattison, includes the Stem Cell Foundation. In terms of stardom, the list of its members reads more like a Chelsea football team than a Norwich football team. I exempt myself from those remarks as I confess that I, too, am a member of that body. Everybody else is a knight or a dame, including Sir Richard Branson, Sir Christopher Evans and Dame Mary Archer. It is a glittering group. I shall probably be asked to take the minutes, which I shall gladly do.
	Some of the work going on in this country is within a year of reaching clinical trial. In London, in Newcastle, at Roslin in Edinburgh—Dolly the sheep emanated from work there—and in Durham, people are carrying out research on brain infarctions and using stem cells to sort out some of the problems. In the long term, there will be work on Parkinson's and Alzheimer's. Diabetes is being investigated and that work is very close to clinical trial. Corneal and bone repair research is going on, as well as work on graft structures for heart valves and blood vessels. Within a year all that work will have reached phase 1 or phase 2 of clinical trials with patients. We can bet our bottom dollar that there will be some successes in that field and the UK is ahead of the game.
	As well as the stem cell foundation, the Medical Research Council will be receiving more money. The Wellcome Trust will be putting more money into such research and the Department of Trade and Industry will also be involved. All that forms a nucleus that will keep this country ahead in one aspect of biotechnology, although of course there is other work going on in the private sector.
	Much money has gone into economic research and knowledge transfer—for example, the Richard Lambert business initiative to enable businesses and universities to work together better. The fault does not always lie with the universities; sometimes businesses do not relate to the people who are developing that bright new technology. I am not referring merely to stem cell research.

Ian Gibson: I thank the hon. Gentleman for that intervention. Yes, I will address the training of our young people in universities in the latter part of my speech, but we must consider more than just the universities: university students and graduates come from schools, so the science, engineering and technology taught in schools, as well as the technicians themselves, are extremely important. We are missing a trick or two in that respect, and I will makes some suggestions about that.
	We are putting much more money into clinical research, and not just in relation to stem cells. We are putting money into engineering under the Budget. We are bringing researchers over from other countries. Indeed, Roger Pedersen—a friend of mine who is a professor in stem cell research on the Addenbrooke's site at Cambridge—has come from California and will not go back because we are ahead of the game. In the next week, there will be another sensational recruit and transfer from across the great pond into this country. So we are well up front.
	The Chancellor announced that we will put money into sustainable energy and other energy developments in relation to climate change and global warming. He also announced science cities. Now there is a concept. I asked various eminent people about the term "science cities", and the only answer that I got was, "Well, that'll be another sign outside a place. Does it mean anything?" If we read the script properly—we have more to do on it—the relationship between the science and business communities will be extended and will grow because of the feeling of being a science city. They exist across the world. For example, Sir Richard Sykes of Imperial college tells me that Novosibirsk—I have been there—in Siberia is an amazing science city, where it is minus 20° centigrade outside, so the scientists and teachers do not get out very much, as hon. Members can imagine. Perhaps that is not a bad idea, so let us have a bit of global cooling as well.
	Bristol, Birmingham and Nottingham are all areas where will we have science cities, and they are being developed under the aegis of the regional development agencies. Not all the regional development agencies are up to speed at encouraging interaction between universities and businesses to develop a part of their region into a science city. The other night, the Home Secretary and I entertained many glamorous people in Norwich in a business tent to collect huge sums of money for the Labour party—who in their right mind would vote for anyone else these days?—and we asked them what they would do about making Norwich a science city. There was a long silence, and we said that, as soon as we get back and get on with business, Norwich would become a science city and we would knock some heads together. The concept is intended to drive people together in order to promote the whole science arena, in the areas that the Government have identified, to the level of world excellence.

Ian Gibson: I have not seen the minutes, but I seem to recollect that there was such a vote following a discussion of the issue at the first meeting. There was no opposition, and Lord May and Lord Winston, as one may expect, go along with me. Those people are forming in that foundation a paradigm for many other areas as well, but we shall return that, no doubt.
	There are one or two storm clouds. I do not pretend that everything is wonderful. There are many more things to do, and the Budget has opened the way for that. There are certainly questions about research and development, as the hon. Member for Worthing, West (Peter Bottomley) will remember in relation to health care. We lag behind in terms of initiatives and developments in comparison with India and China, but we should not hold up our hands and wallow in defeat; we should say that we can do as well, if not better, and that is the spirit that the Budget has delivered to many scientists in this country. For the first time, we have doubled that budget and people are smiling and beginning to work, but there is more to do in that arena.
	The problem is not just competition, but trying to persuade small businesses to develop that sort of work and to increase research and development in science-intensive small businesses. A private Member's Bill that my hon. Friend the Member for Cambridge (Mrs. Campbell) intends to present has been picked up in the Budget, which requires Departments to provide money for research. It will be mandatory for 2.5 per cent. of the research and development budget to come from Departments.
	There are problems accessing venture capital. Venture capitalists are strange people—I met some in Cambridge on Friday night—and talk in billions not millions of pounds. They work in the short term and want results within one or two years, but results take longer than that in many enterprising and innovative research arenas. We must marry those two different views and, at last, we are starting to talk to venture capitalists. The aim is to encourage small businesses—not just bright people from universities but inventors and the James Watts's of this country because they have bright ideas and need support.
	Another problem is VAT, as hon. Members know, for organisations involved in biomedical research and so on. I have taken two cases to the Inland Revenue to ask its officials to remove VAT because of the nature of the research. A charity in my constituency is trying to develop a cancer information centre, but has been told that because it is connected with a private finance initiative hospital it must pay the full rate of VAT. The money comes from charity and there is a lot of reaction against that decision. The Minister will recognise that problem, which arises time and again. I never want to meet another official in my life, although when one puts the arguments one sometimes wins £1 million for a university or £2 million for a charity. I hope that something will be done about the VAT problem. The process is clumsy and we must do something about it.
	There is something fundamentally at odds with the problem of developing small industries. The antipathy of many young people to taking their research and discoveries to the marketplace must be seen to be believed. The culture in this country is that people dirty their hands if they go into business after doing magic work on this, that or the other, whether chemistry, physics or mathematics, and so on. The sort of people that I have talked about—Paul Grayson, Chris Evans and Richard Branson—have had such experience but they are true entrepreneurs in a sense that is sometimes hard to define. Many people think of themselves as entrepreneurs, but are not because someone else takes on the marketing and development problems, proof of concept stages and so on. Making a discovery does not suddenly result in a glorious product that the world awaits. It must be marketed and it is difficult to tell someone to leave it to another professional or expert in the area to develop the product. Partnership and teamwork are necessary and we are beginning to accept that.
	I once thought I had the answer to prostate cancer. I discovered a gene and went to my bosses at the university to ask them for advice on how to start a company. The answer—I kid you not—was, "You need headed notepaper." That was depressing. To get a kick-start and an introduction to someone who has been through the process is a big step. One gets depressed, but then one gets on with winning the research assessment exercise and glorious kudos as a scientist, but one forgets the other aspects of the work. We need to do much more to encourage that side of matters.
	If there is one factor that distinguishes the US from this country it is that people in the US take risks. In the US, people can fail once, twice and even three times, but they are still not failures. It is recognised that it may take four attempts to achieve something, but every time something does not quite make it, lessons can be learned. That is how Americans are encouraged to think, but that does not happen in this country. People are deflated and put down if something does not work. The knives go in and people are put off. We have to change that culture, and we should start in schools by encouraging people to experiment and think. If they do not succeed the first time, they should be patted on the back and told to try, try and try again. We have a long way to go in introducing that attitude into our teaching culture.
	The Government have also talked about other aids for small businesses, including tax credits, involving the Inland Revenue, ways to give people the confidence to get on and do it, and setting up Lambert-type interactions. However, we still have a serious problem with physics and chemistry departments in universities closing. That is not a new phenomenon, but when universities lose key departments, it is demoralising for those who work in them and it creates a threatening environment for everybody else. I am pleased that the Government have started to consider how we can prevent such closures.
	We know that we need bright young people, not only for policy-making but for research, development and innovation. However, the number of people taking the subjects I have mentioned has been declining for several years, and that contributes to the closure of departments. If they are closed, we will not be able to take on the extra students coming through the system who want to be chemists or physicists, or to develop new subject matter. We have intervened to try to increase the number of university places, but we have to be smarter. We have to look at the root cause of the decline in student numbers that has led to the closure of departments. We need to inspire students and young people in schools to study science. We want teachers who can be creative and enthusiastic. We need to change the curriculum, because it is dull and boring. When I visited a school in Norwich, I found that stem cell research was not taught to scientists but to those studying religion. That is fine, but scientists should be talking about the big idea in science in this country at the moment. I invite colleagues to ask whether stem cell research is being discussed in the schools they visit.
	Another reason for the falling numbers of science students is the funding arrangements for research and teaching in this country. Departments often nick money out of their research budgets to pay for teaching. Strange ratios have developed for different subjects, but nobody seems to know why one subject gets more for teaching than another. I am sure that there is an explanation, but it is not convincing in terms of the overall visionary economic plan that we have to increase the number of students in some areas. Nor can anybody tell me how many physicians, mathematicians or biotechnologists we will need. There is no overall plan, but we need one.
	We must also be honest and admit that not all universities can do everything. That is a brave thing to say, but every region can provide the surety that, whatever subject someone wants to study, they can find a course that they can follow within easy travelling distance of home—I shall not go into all the reasons why someone might want to stay at home or why they should not do so. We need to take hold of the regional development agencies and take something from them—not just money but some of their people, who could interact with others on a regional affairs committee or some such body to solve our infrastructure problems in order to ensure that the subjects are taught. We will never have enough money to teach every subject that we want to teach in universities. That is a hard thing to say and believe. Yes, we will get more students; we want more graduates and we want more of them to go out into the business world and into pure blue skies research. We must allow for that on a regional basis, although I do not see it happening in some RDAs.
	Policies must not dictate that research is the only thing that is important. A vice-chancellor once told me, "Forget teaching. Give the students 20 minutes and then walk out and get on with your research. That is much more important." We must not have that. We must create structures in which very good teachers just teach and do not do research, and vice versa. We must work out such interaction on an original basis.
	A vice-chancellor who does not live far from me once said, "If you were starting the university system in this country over again, you would not have Essex and Norwich universities down the road from each other." Both Essex and the university of East Anglia have had to close physics and other subjects because neither is big enough separately. Together, they would be dynamite. We have a long way to go to get such things going. All the restructuring in universities at the minute is demoralising without a bigger, visionary picture.
	The Budget opens up all these questions. For the first time in my life we are beginning to hear serious discussion about science, technology and engineering. There is a serious belief in our Government about using knowledge to create the businesses and wealth that will not only provide jobs, excitement and enthusiasm throughout people's lifetimes, but enable us to compete in the world markets, which are becoming tremendously serious. We can do it, and this Budget is the first line in the sand.

Phil Willis: I begin by thanking the Secretary of State for Education and Skills for her comments about our teachers and lecturers. I share the view that in most schools, colleges and universities, to which the hon. Member for Norwich, North (Dr. Gibson) referred, an excellent product is delivered to our young people, and we should celebrate that rather than always try to find reasons to denigrate.
	I welcome the admission by the hon. Member for Westmorland and Lonsdale (Mr. Collins) that the Conservative Government made a fundamental error in introducing compulsory competitive tendering for school meals. I am sure that he was referring to that fatal mistake of saying what matters is how cheaply school meals can be provided rather than their quality. The hon. Gentleman has always been honest enough to admit the huge mistakes that the Conservatives made during their 18 years in office.

Phil Willis: One always welcomes a repentant sinner; that is much more important.
	The hon. Member for Norwich, North made a powerful and thoughtful contribution, as he does to any education debate. However, I wondered when he would get to several elements of Government policy that move us in the opposite direction. The recent publishing by the Office for Fair Access of the universities that are to charge so-called differential fees reveals that the full £3,000 top-up fee will be charged for 91 per cent. of courses. I do not believe that that is a differential. That means that there is a new flat-rate fee of £3,000 in our universities. I had hoped that the hon. Gentleman would say what impact that will have and how that will detract from the ambition to attract the young people whom we want to go to university. Are we to retrench a middle-class higher education system, which he and I would decry?
	I also wanted the hon. Gentleman to say something about the letter from the Secretary of State to the Open university and to Birkbeck. During our debate on higher education last year, we were promised a review of part- time students and funding, which would start with work at the Open university and Birkbeck. The review, however, concluded that they will not receive a single extra penny to support part-time students, and both institutions will regard that as a betrayal. As we move towards a higher education market in which more students study part-time—they will be earning and learning—everyone, whatever their political party, must address the issue.

Phil Willis: I am grateful to the Secretary of State, but the hon. Member for Worthing, West (Peter Bottomley) will note that rather than having found a solution, she is hopeful of finding one. To be fair to her, the OFFA letter to the Open university and Birkbeck rules out any additional resources to support part-time students next year. That is the starting point.
	In response to the hon. Member for Norwich, North, after the general election, all hon. Members must revisit the issue of higher education. I do not believe that our debates on the Higher Education Act 2004 resolved anything; they merely fudged the funding issue. We did not address the purpose, function and shape of higher education and its relationship, not only with further education but with the 14 to 19 sector. If we are to meet the 21st-century challenges that the hon. Gentleman identified, we must undertake a radical review of post-14 education through to higher education and level four provision. I find that an exciting, not a negative, concept, and I hope that all political parties will support it.
	No one knows what will happen to them after the election or what role they will have in the House. For the past eight years, however, I have attended the annual ritual of the Chancellor's Budget. I was very impressed the first year, but less impressed the second. I may have become a little more cynical and a little less gullible. [Interruption.] I am grateful for the confidence of the Minister for Lifelong Learning, Further and Higher Education that I am not a cynical person. I am not Welsh either. However, after 50 successive quarters of growth and the proud boast that our economy is now outperforming virtually every other economy in the world, why do our students have to incur massive debt to finance their university education? Why do the elderly have to pay for care in their old age, why do we all have to pay for simple health measures such as eye checks and dental checks—if one can get a dentist—and why is it not possible to guarantee our poorest children a simple nutritional meal at lunchtime unless a celebrity chef intervenes? Why, when our country was infinitely less wealthy, were all those services free? I am often asked that question by my constituents, but it is extremely difficult to answer.
	It is not until one sifts through the fine print of the Red Book that one realises that all is not as it appears. The Chancellor has created a sophisticated illusion that we are all winners, but in reality he has produced a Budget in which, to pay for the increases for pensioners, schools, child care, stamp duty relief and next year's bus passes for the elderly, he has assumed income that will be hard to guarantee and even harder to sustain.
	I shall give one example. The Chancellor has assumed a £2.825 billion tax receipt over the next three years by clamping down on fraud and tax avoidance. Considering that this is the ninth Budget presented by the present Chancellor, one could be forgiven for asking why he has not already dealt with such massive tax fraud if it is so obvious.

Phil Willis: I am grateful to the hon. Gentleman for his intervention, but if it is so straightforward to recover all the money being lost through tax avoidance, why has it taken nine years to do so? If it had been done sooner, we might not have had to impose fees on university students. And if there is another £35 billion out there, we would not need the James review, would we? We would be able to pour that sum into the coffers.
	What happens if the Chancellor is not successful? He has not been successful yet in driving down that fraud. Presumably, that is why pensioners are getting a £800 million rebate for only one year, and why taxes will have to rise to meet any shortfall. We should not assume that any of the proposed benefits announced last Tuesday can be sustained without extra borrowing or increased taxation. Equally, we should not assume that all the benefits that the Secretary of State for Education and Skills announced today or that were announced in the Budget are as transparent as they first appear.
	The Liberal Democrats support and applaud extra investment in education. On the surface, the Budget is brimming with extras. As a trustee of the e-Learning Foundation, I particularly welcome the additional £300 million contribution from the Treasury to the e-Learning Foundation. That is a significant and welcome sum. It will help lever additional funds from parents and business to tackle the huge digital divide that exists in parts of the country.
	There was an impression that the introduction of IT in schools had been completed, yet in 2004 one third of our secondary and primary schools failed to meet the target for the number of computers they should have, and half of all computers in our primary schools are at least three years old. The New Opportunities Fund money that went into providing much of that equipment was seen as a one-off, but unless we can sustain that technology and get head teachers to continue to invest in it, all we will do is build in obsolescence, which will do nothing to bridge the digital divide. The stark realisation has dawned, and the Chancellor admitted in his Budget speech, that we need to provide laptops for children to take home and use there.

Desmond Turner: We would all agree that smaller class sizes are highly desirable. However, as I am sure that the hon. Gentleman accepts, per capita funding for students in the independent sector is at least double what it is in the state sector, and that is after this Government have practically doubled per capita funding. Class sizes of 15 would be marvellous, but how does he propose to pay for them?

Phil Willis: I am grateful to the hon. Gentleman, because I am coming to that point. It is important not to have fanciful economics in terms of how we will pay for election promises.
	The Government have done a good job as regards early years. We support the Sure Start programme, and it is good to hear Conservative Members say that they will support its continued roll-out. We support the extra 3,500 early years centres by 2010, and that will certainly be in our manifesto. But I ask the Minister this: why compromise that huge achievement by moving children from groups of eight, or at the most 12, in nursery classes to groups of 30 or more when they reach infant classes in primary schools? I think that the hon. Gentleman would agree that that does not make sense.
	The School Standards and Framework Act 1998 said that there could not be more than 30 children in a class, but the response of the Department for Education and Skills to a recent parliamentary question shows that a significant numbers of classes in our infant schools have more than 30 children in them. There are good explanations for that, so I do not think that schools are bypassing the policy. I think that there are about six categories under which children who arrive in an area may join a class and thus take its size above 30.
	If we are talking about investing billions of extra pounds into early years education, why compromise that if there is another way of achieving the objectives? Liberal Democrats have chosen to invest resources to reduce key stage 1 infant class sizes to 20. That would require employing 15,000 more infant teachers, so the project is large. We would pay for that by scrapping the child trust fund. We have always made it clear that it is far better to invest in children when they are five and six than to give them something that they can cash in at the age of 18, so we have made a policy choice. We could use that £1.5 billion to give our youngest children the best chance that they have ever had at the beginning of their school careers.

Phil Willis: With due respect to the hon. Member for Brighton, Kemptown (Dr. Turner), either we will have a sensible debate in the House on an important issue, or we will not. The hon. Member for Upminster (Angela Watkinson) made a sensible intervention. I actually suggested class sizes of 20, not 15, but the logic behind what she said was right. The Government are putting more than £9 billion into a primary school build programme, so we would prioritise that and ensure that additional classrooms were available to accommodate additional teachers.
	I also tell the hon. Lady that the demographic trend shows that the number of children coming into our primary schools is significantly down. Something in the region of 6,000 classrooms and teachers will become available simply because of falling rolls. It is logical to the Liberal Democrats that rather than allowing those teachers simply to go out of the door through redundancy or retiring early, let us use them as part of our recruitment of 15,000 teachers and ensure that they are working with our youngest children to give them the start in life that only the wealthy could afford in the past. The Conservative party and the Government might not accept that that would be a proper use of the £1.5 billion that the Chancellor has set aside for the child trust fund, but the Liberal Democrats will go into the election saying that giving children a flying start to their education is our priority.
	I was pleased that the Chancellor indicated in his Budget statement that he was adopting a Liberal Democrat policy that he heard first at a conference of the Association of Colleges—I think that the Economic Secretary to the Treasury was at the conference this year. I spoke at the conference about a policy of colleges for the future. The Liberal Democrats have always asked what is the point of renewing all the schools when what is often needed in communities is new colleges. To be fair, the Chancellor has come on to that ground and given an extra £350 million for the final two years of the spending review, which will make a total amount of £1.5 billion. That welcome new money should be seen as a down-payment. I hope that, when the Secretary of State makes her statement on skills at the Dispatch Box tomorrow, she will say more about that capital investment in our stock. If we could bring together the colleges for the future and schools for the future programmes and view them as one entity, we would do an enormous amount to build an infrastructure for our young people in the future.
	The Liberal Democrats would like the £5 billion of capital resources that is earmarked for the increasingly discredited academy programme to be used to rebuild and build facilities for 14 to 19-year-olds. We will make a quantum leap in the 14 to 19-year-old programme to improve our depressing figures for truancy, school exclusion and so on. If we give young people a flying start and wonderful options at the age of 14 to 19, including the exciting things that the hon. Member for Norwich, North mentioned, we will keep kids in our schools and in learning, feed into industry and higher education, and have well motivated and qualified young people.
	When the Economic Secretary winds up, perhaps he could say a little about whether the 35 per cent. ceiling on what the Learning and Skills Council can give as a capital grant for rebuilding a college will be retained or whether colleges will get access to 100 per cent. capital funding in the same way as schools if they rebuild their kit. It is grossly unfair that one sector gets 100 per cent. funding from the state and another, which we regard as crucial, does not.
	Although the Chancellor has at last acknowledged the need to invest in further education stock, today revealed another example of the scandalous injustice that affects two thirds of our 16 to 19-year-olds—the 700,000 people who study in FE colleges. Those young people, who disproportionately come from poorer, less traditional and less affluent backgrounds, are short changed by the sum of approximately £500 a year—a loss of some £500,000 to the average FE college.
	The Budget was an opportunity to make some progress towards the commitment, made during the passage of the Learning and Skills Act 2000, that schools and colleges that delivered the same programme would receive the same funding. Five years on, the gap is 12 per cent. to 14 per cent., despite initial claims to the contrary by the Minister for Lifelong Learning, Further and Higher Education in a parliamentary answer to the hon. Member for Finchley and Golders Green (Dr. Vis) on 21 February. When I challenged the Minister, he admitted in a parliamentary answer on 17 March that he had conveniently dealt with only part of the funding gap in his reply to the hon. Member for Finchley and Golders Green. He stated:
	"I recognise that there is more to overall levels of funding than differences in funding rates and I acknowledge that there are other important differences between school and FE funding."—[Official Report, 17 March 2005; Vol. 432, c.447W.]
	We welcome that acknowledgement because we have never had it previously.
	We are committed to creating a level playing field between schools and colleges for revenue funding. However, it is difficult to quantify the problem when Ministers refuse to provide accurate information about the funding gap. Will the Secretary of State agree to place in the Library—it would be good if she did it now—the recently completed report of the Learning and Skills Development Agency, which the Learning and Skills Council commissioned? It quantified the funding gap and is the definitive research into that. We therefore know what we are talking about. I hope that when the Economic Secretary responds, he will give a commitment about when that research will be published so that we can all have access to it.
	Further education is constantly left out when we discuss education in the House but it is crucial if we are to deliver the skills agenda that the country needs. It cannot be right that lecturers in FE colleges are paid on average 8 per cent. less than teachers in schools, and that gap must be closed. It cannot be right that the facilities in our FE colleges are often outdated and overcrowded, or that enrichment programmes are often decimated in order to make a budget's ends meet. This hardly shows a commitment to world-class vocational options.
	Yet, as sharp-end delivery struggles for resources, there appears to be little brake on the spiralling cost of administration. Administrative costs for the Learning and Skills Council have now rocketed to a massive £330 million, with additional administrative costs added to almost every programme. I hate to give succour to the hon. Member for Westmorland and Lonsdale, but these spiralling costs represent a real issue that needs to be addressed. There is no one else in the Chamber at the moment who sat on the Learning and Skills Bill Committee, but we were told at the time that huge savings would be made by moving from the Further Education Funding Council and the training and enterprise councils to the new Learning and Skills Council. However, in 2000—the last year in which they operated—the FEFC spent £29 million, and the TECs £118 million, on administrative costs. Yet, four years later, the administrative costs of the Learning and Skills Council have spiralled to £330 million. That is a huge additional cost, yet we were told in 2000 that there would be a £50 million reduction as a result of the introduction of the LSC.
	The 47 regional learning and skills councils have grown like Topsy. They now have huge bureaucracies to deal with relatively small amounts of money, yet any major decisions get referred to Coventry. The adult learning inspectorate now spends £28 million a year, and the new Sector Skills Development Agency—the Government's pride and joy—now has a budget of £188 million over the next three years. I want to know what all these organisations actually do to add value to the front-line services that are delivered in the workplace and in our colleges.
	The Liberal Democrats believe that it is time for a radical realignment to simplify the structure and to amalgamate the Learning and Skills Council and the Sector Skills Development Agency with the regional development agencies to form single regional skills and development agencies. We need to slash red tape and bureaucracy, and use the savings to bridge the funding gaps in colleges so as to provide the resources to skill our work force. Further education and the skilling of the nation are crucial issues, and we are delighted that the Secretary of State is to come to the House tomorrow with a new statement. In the meantime, I hope that the Minister will be able to respond to a number of the issues that I have raised today.

Desmond Turner: I endorse the remarks made by my hon. Friend the Member for Norwich, North (Dr. Gibson) about the crucial effect of the investment that the Government have made in science and its spin-offs. The hon. Member for Worthing, West (Peter Bottomley) made a rather cheeky intervention on my hon. Friend and asked him to name a scientist who would wish to see the return of a Labour Government. I have to say to the hon. Gentleman that I know many scientists—some of whom are extremely distinguished—and when I put to them the prospect that there might be another Conservative Government, their reaction is either to recoil in horror or to laugh with derision, because it is total nonsense and an absolute oxymoron. There is no comparison between the Conservatives' proposals and the seriousness with which this Government have addressed the issues of higher education and the feeding through of the results of higher education research into innovation and into our economy, the growth of which have doubled as a result of this Budget.
	Conservative Members have made much of the £35 billion, or rather they have tried to make very little of it. They have tried to pretend that it is not there or that it is something that we have dreamt up to beat them about the head with. Can I assume, therefore, that Conservative Front Benchers are repudiating the statements of the shadow Chancellor? If I understand him correctly, he has said that at the end of another six years a Conservative Government would be spending £35 billion less than us. If that is not £35 billion of cuts, exercised at the rate of approximately £6 billion a year, what else is it, or does the Conservative party not understand the meaning of the English language?

Desmond Turner: It is nice to know that Conservative Members see the relevance of serious politics. It is quite simple: £35 billion less is £35 billion less. They cannot talk that away, and they certainly cannot laugh it away.
	The Opposition have described the Budget as a vote now, pay later Budget, as if the Chancellor had introduced a few populist measures to tempt people into voting Labour. Conservative Chancellors never did that, did they? Perish the thought. I am surprised, given the nature of the criticism that the Opposition have mounted, that they have not put forward their own coherent alternative Budget. It is completely missing.
	In the Red Book, we have a coherent, joined-up financial statement whereas all we have had from the Opposition is what can best be described as a few cheap tricks to try to tempt the grey vote back into the Conservative fold. I seem to remember that a previous Conservative Government broke the link between pensions and earnings. In so doing—in the high inflation times that they presided over, with high wage inflation—they cheated pensioners out of about £22 a week per head.

Desmond Turner: Yes, I know. Ability to pay would also be taken into account, which is not the case currently, apart from in relation to benefits. I would therefore be confident that a pensioner discount would last not just for the year after the election but in perpetuity. It needs to be done in the round, however, as it is a complicated issue, and cannot be done as a little gesture.
	Another of the proposals that I have heard launched was free care for the elderly. That great proposition, which I am sure that we would all love to offer, has been promised by the Leader of the Opposition. However, those who read the Conservative documents carefully, as I have, will see that it is not quite as simple as that. The Conservatives are promising to pay for care for the elderly only if the elderly person concerned has first paid out of his or her own resources for three years. That means having to have well over £20,000 in liquid assets, and also having to live for three years. It is a sad fact of life that the average life expectancy of those who go into residential care is less than three years. That too is something of a false promise.

Mark Simmonds: I shall respond to the hon. Gentleman but then I want to move on quickly. One of the fundamental reasons why Conservative Governments have often struggled with the economy is that—probably with the exception of the transfer of power that will happen on 6 May—every Conservative Government have inherited a shambles from the previous Labour Administration. [Interruption.] One example is 1979 and another is 1970.
	Despite the Government's claims, almost all independent commentators believe that there is a black hole in the Chancellor's figures and thus a necessity for fiscal consolidation and tightening. The Government will need to cut spending or raise taxes—perhaps both. They will have to retreat from their current expansionary stance on fiscal policy and control their spending. If an election were not looming, taxes would now be increasing against the backdrop of a faster than anticipated deterioration in the Government's budgetary position.

Mark Simmonds: I thought the hon. Gentleman's intervention positive and constructive until, rather sadly, he became wayward and disappeared off the path towards the end. I totally agree that investing in education—from pre-school through to higher and further education, about which I shall say a little more later—is the key to producing a skilled work force, thus increasing productivity. Indeed, that is why the shadow Secretary of State for Education and Skills, my hon. Friend the Member for Westmorland and Lonsdale (Mr. Collins), made it clear that the Conservative party plans to spend more on education than the Government, for the very reason that we believe that education forms such a fundamental part of building this country's economic success for the future. That is why he has been so successful in disseminating the Conservative party's education policy.
	In addition to the importance of upskilling the labour force, the Government trumpet their record on education, as the hon. Member for West Bromwich, West (Mr. Bailey) was trying to do. They rightly analyse that education is a key factor in raising aspirations and economic performance, but despite large sums of taxpayers' money going into schools in particular, the significant improvement in school standards occurred between 1997 and 1999, when the Government implemented their literary and numeracy strategies, while sticking to the previous Conservative Administration's spending plans. So without real, radical reform of the education system, there is no correlation between putting in additional public sector funds and driving up standards. That is evidenced by what has happened between 1999 and 2005.

Mark Simmonds: I am afraid that I do not agree with the hon. Gentleman. Like him, I represent a low-wage, low-skill constituency where education is the key for people to escape from socio-economically deprived areas. I would argue that money alone is not the solution. We need more radical reform, including reform of the curriculum, so that those students who do not currently engage with it do so. That is why I welcome the part of the Tomlinson report that the Government have welcomed. I can see no direct correlation that evidences and supports what the hon. Gentleman says.
	One of the Budget documents, "Long-term global economic challenges and opportunities for Europe", gives on page 48 a list of conclusions about those challenges, one of which is
	"the increasing importance of skill levels and flexible labour markets".
	There has been virtually no progress on the former since the Government came to power and, without question, the labour market is less flexible, more bureaucratic and therefore less competitive than in 1997. I shall draw on some examples from my constituency. In rural and coastal Lincolnshire, we suffer from low aspiration at school, and when coupled with poor penetration from the higher and further education sectors, the work force struggle to upskill, thus exacerbating and perpetuating a low-skill, low-wage economy. Some 50 per cent. of the work force have no qualifications, as opposed to the national average of 29 per cent.
	I am pleased that the Secretary of State for Education and Skills announced that £1.5 billion would go into the FE sector. I hope that, unlike most of the Government's announcements, some of that money will find its way to my part of Lincolnshire, where people with a desire to upskill will be able to do so. That factor, when coupled with poor access and the seasonality of employment, causes real socio-economic problems. In Ingoldmells, a resort just north of Skegness, there is a 600 per cent. increase in unemployment out of season and a 30 per cent. change each year in primary school rolls owing to seasonal fluctuations. That makes it even more disgraceful that the Government manipulate funding formulas and move resources away from Lincolnshire to shore up the Labour party's votes in its urban heartlands.
	In addition, people may have been thinking of bringing inward investment and buying buildings to refurbish in the poorest wards in my constituency. I notice in the Budget that the stamp duty exemption for investment in and refurbishment of commercial property in socio-economically deprived wards will be stopped. That will stop much-needed regeneration and therefore possible employment in those areas.
	I do not approve of the duplicitous way the Chancellor announced his Budget, and I will give the House four examples of the significant positive points that he attempted to put over in his Budget. First, there was no mention of how raising the stamp duty threshold will be paid for by abolishing the stamp duty exemption for commercial investment in deprived wards. Secondly, there was no mention in the Chancellor's remarks that pensioners would get £200 off council tax for one year only. Thirdly, there was no mention that free bus travel would apply to off-peak tickets only. Fourthly, there was no mention that most of the money for the primary schools rebuilding programme has been announced already or that the relatively small additional sum would not be spent for another four years. It is because of that sort of duplicity that I believe that many politicians are held in such disdain.
	Finally, macro-economic stability is essential, but we must retain national competitiveness, and that will not be achieved by ever-increasing taxation and ever-growing public expenditure on public services, without fundamental and core reform.

Adrian Bailey: I welcome the Budget and want to explain how its provisions will affect my constituents. While praising its provisions and the Government's work in my constituency, I want to suggest some areas where we could go further or change direction a little.
	My typical inner-city constituency is described as historically deprived. Four of its seven wards are in the 10 per cent. of areas with greatest urban deprivation. It has a low skills base, with almost 48 per cent. of my constituents having no qualifications, compared with the average of around 30 per cent. A lower than average number stay in education to the ages of 16 to 19, and a much lower than average number go on to higher education. It is typical of urban and historically deprived constituencies, but that is only one part of the picture, because it is being transformed in part by the general improvement in our economic situation. Low interest rates have led to a boom in house prices and construction, and the increase in public sector investment in the past few years is beginning to show in schools, the number of policemen, hospitals and the number of general practitioners.
	The hon. Member for Westmorland and Lonsdale (Mr. Collins)—he is no longer in his place—said that the transformation in our economic situation started before the Government came to power. However, he did not say that, if that premise is accepted, public investment in local authorities, particularly in education, did not improve. In my area it went down, despite claims that the economy expanded under the Tory Government. The fact that a number of then Cabinet Ministers are now leading the Tory party can give no confidence that in the unlikely event of the Tories being returned to power the situation would be any different. If they could not do it then, why should we believe that they could do it now?
	The child trust fund has enormous potential to combat long-term poverty and to improve the take-up of long-term education. The Liberal Democrats' spokesman, the hon. Member for Harrogate and Knaresborough (Mr. Willis)—he is no longer in his place—said that there was a genuine policy difference between the Liberal Democrats and the Labour party, and I accept that. I believe that there is a strong and legitimate case for the child trust fund in education. First, it involves that proportion of the electorate who do not have bank accounts and in areas such as my constituency that is 20 per cent. of the electorate. The fund will provide a stake in the commercial world and with it an incentive for financial education, so that people understand and use that stake effectively. Without the child trust fund, that will not happen. Secondly, in the long term it will provide a fund that can be used for higher education. I have no doubt that if we are to reach our targets in higher education there must be a funding commitment, whatever party is in power.

Adrian Bailey: The hon. Lady is missing the point, because the Government are doing that as well. The level of investment in early-years education and schools is so great that it is questionable what the £1.5 billion that has been allocated for the child trust fund could provide. It is best used to provide young people with a stake in the future.
	There is a general debate about poverty and its impact on education. If the bottom 20 per cent. of people in deprived areas are not given a stake in the future, all the evidence suggests that they will be trapped in a circle of poverty. The child trust fund provides a gateway out of poverty.
	I recently visited the maternity unit at my local hospital, not because I am a politician who is predisposed to kissing babies—when I get close to them it usually has a horrifying effect on them—but because I wanted to talk to the young mothers about opening child trust fund accounts. Interestingly, while most had heard of the fund, none had opened an account. I flag that up as a serious issue, because the Inland Revenue is administering the fund and most people do not readily engage with a brown Inland Revenue envelope when itcomes through the door, particularly the bottom 20 per cent. of people who are not used to dealing with financial matters. It was suggested to me at the hospital that it would be a good idea if people were available not to advise young mothers where to open an account but to outline the scheme to them when their babies are born, to ensure that they take it up. Young mothers readily take advice from health specialists, and we should look into that joined-up advice to ensure that those who most need child trust funds have the information they need to set them up.
	I have three Sure Start schemes in my constituency, and I am impressed by the work that they are doing. They engage young mothers and young children in a process that can affect them significantly in the long term.
	I am pleased with the provisions for helping lone parents back to work, because that is a route out of poverty for many young parents. I have a disproportionate number in the northern part of my constituency.
	I also welcome the emphasis on child care, which will enable young parents not only to find jobs but to find the necessary child care, which might otherwise be a hurdle.
	Above all, I welcome the proposals for investment in primary schools. Last Friday, I visited Great Bridge school, a private finance initiative school that has just opened in Great Bridge, one of the most deprived areas of my constituency. It replaced a building started in 1870. Despite the best efforts of the teachers and other staff, the physical state of the building was an obvious impediment to good education. I toured the new building on Friday and was inspired by the change in attitude, the spaciousness and the state-of-the-art technology, including whiteboards and computers, which have transformed the morale of the staff.
	Comments have been made about the impact of ICT on educational standards. It could be too early to reach a judgment on that particular school, but the technology there is providing marvellous motivation for both pupils and teachers. Teachers have told me that pupils are more ready to engage in computer learning than in some of the traditional forms. The quality of pupils' work, and its presentation, is also much improved, and that gives them a sense of self-esteem and self-worth. Our future lies in computers and whiteboard learning, in my opinion, and I am therefore very pleased with the level of investment in that technology in the Budget.
	It is now difficult to find a secondary school in my constituency that has not had major building work carried out in the past four or five years. GCSE results have improved by 50 per cent. since 1997. The results at Alexandra high school have improved by 80 per cent. and those of Willingsworth high school by 100 per cent. Wood Green high school had results 12 per cent. better than the national average, which is almost unheard of in my area. Although those are just the dry statistics, they represent a revolution in life chances for the young people involved—50 per cent. more of them leave school or move on with good educational qualifications and a bright future ahead of them. As a result of the education maintenance allowance, which was piloted in my borough, more pupils are staying on in education and more are going to university.
	I have a few comments about 14–19 education and the proposals outlined by my right hon. Friend the Secretary of State for Education and Skills recently. I am happy to say that my constituency still has a significant level of manufacturing employment of about 30 per cent. However, manufacturers tell me that in spite of the general employment situation, they still face a skills shortage. They have real problems in getting young people to consider industry and manufacturing as a potential career. I hope that engaging industry in the formation of our vocational curriculum for the 14–19 age group will mean that that problem is adequately addressed.
	I come from a generation that thought that if one wanted to get on in life, one did not work in a factory, but in a white-collar job. We have to have a counter-revolution, because if we want this country to be successful and give industry the added value of our investment in education, we must ensure that some of those who benefit want to use it in the industrial and manufacturing context.

George Young: Indeed, and I shall come to that in a moment. It was the right thing to do, in view of the changing fortunes of the Government finances.
	Over the weekend I detected some fatigue following the exchange of fire last week about public expenditure totals and who will spend how much. My heart sank when the Secretary of State for Education and Skills introduced the debate this afternoon with a sentence about £35 billion, which I suspect, every special adviser now writes into every Secretary of State's speech. My view, which I fear will not be shared, is that the Easter recess would be a useful time to have a ceasefire and spare the public a little of the warfare that is raging. There is real election fatigue out there. I remember reading that in the first world war, on Christmas day the soldiers stopped shooting and played football in no-man's-land. That might be a useful way of spending our Easter, but I suspect that all three parties have major political onslaughts planned for the Easter recess.

George Young: It would have been welcomed by poor pensioners in my constituency who were unable to wait for the NHS to treat them and dug into their modest savings to pay for private treatment. If I may say so, Labour Members are wrong to assert that the only people who would benefit from that policy are the very well-off; that is simply not the case.
	The Chancellor decided against raising tax allowances above inflation and is instead putting the money into tax credits. The House should pause and consider the practical and philosophical issues behind his decision, which I do not find easy to endorse. In the briefing that we all have today, Age Concern tells us that nearly one third of pensioners eligible for pensioner credit fail to claim it. This is not a new benefit, and there has been time for the take-up campaigns to kick in, but there is still a very low take-up, coupled with the horrendous complexity of filling in the forms and then operating the system. In today's post, I received a typical letter from the Inland Revenue. I quote:
	"I am sorry to hear of the difficulties that Mrs W has experienced with her tax credit claim. Having looked into her claim, I can confirm that we have issued Additional Tax Credit Payments to the sum of £269.92 on Feb 22nd in order to prevent any further hardship."
	We all have letters like that from the Inland Revenue about tax credit cases in our constituency. Of course, the claimant will have to pay back that money in the years ahead. The regime that the Chancellor keeps on developing has become so complicated and top-heavy that it is time to stand back and have a look at it.
	When the Inland Revenue makes a mistake, it will ask the person to pay it back if they have not spotted it. How many of us who fill in our own returns will check the Inland Revenue's calculations line for line? Most of us will assume that it is a professional department and that having given it the correct information, it will provide the correct assessment. But what about the single parent who has filled in the form correctly, gets incorrectly assessed as an overpaid, and is then told that she should have spotted the overpayment and that the money must be repaid? Then the payments stop, she cannot pay the childminder and has to give up the job, and is back where she started. The House should have a serious debate about the alternative of raising the allowances, reducing the interface and streamlining and simplifying the system rather than piling extra resources into an increasingly complex scheme.
	One or two Members mentioned council tax. Here we have another one-off payment to council tax payers alongside the one-off increase in grant of £1 billion to local authorities that was announced last December. What will happen next year, when the council tax payer will not get the £200 and when the £1 billion to local authorities is not repeated? It strikes me that the approach to local government finance is hardly joined up or coherent—it seems to be a rather ramshackle and unstable structure.
	I want to say a word about the emergency action that the Chancellor took in the Budget. Of course, from time to time the Chancellor has to act quickly to stop an abuse, and I have no quarrel with that. However, the withdrawal, without notice, of stamp duty for commercial property in disadvantaged areas struck me as odd. The Chancellor introduced that with a great fanfare in 2003, and such inner-city initiatives take time to bed down and get taken up. The wards that the scheme applied to were chosen by the Chancellor, and there may be developers who were induced to invest and develop and now find themselves some 4 per cent. out of pocket. I hope that that does not damage the credibility of the Government's initiatives, which depend on trust and genuine partnerships with the private sector.
	I want to end with three brief points on education. First, on school meals, I cannot be the only Member who has been e-mailed and written to over the weekend following the Channel 4 programmes with Jamie Oliver. There has been a very good response, and it may be that those programmes have the same impact on school meals as "Cathy Come Home" had on housing policy some 20 or 30 years ago. I was a little disappointed with the Secretary of State's response and delighted to hear my hon. Friend the Member for Westmorland and Lonsdale say that my party's response to the challenge of a policy on school meals will come out shortly and will be more imaginative than that of the Government.
	Secondly, the Chancellor made a big play about deregulation in his Budget, but we heard nothing from the Education Secretary about deregulation in education. There is a real appetite on the part of teachers for less regulation and a more streamlined approach so that they can use their skills on the interface with children.
	My third point on education has not been mentioned—it concerns work force remodelling. That is an initiative due to be introduced this autumn whereby 10 per cent. of teaching time is made available to teachers for preparation, so that for one half-day per week they will no longer have to take classes. I have no difficulty with that policy, but there is real concern that insufficient resources have been given to schools to enable them to pay other people to take over the classes that the teachers will no longer operate. I read in the press a few days ago that although head teachers had initially supported the policy, they were having second thoughts because it was under-resourced. I hope that the Government will take that seriously. It is a small cloud on the horizon, but if they do not get it right, there will be serious disruption in schools later this year.
	The Budget is unsustainable economically and has been unsuccessful politically. I therefore look forward to a Finance Bill introduced by my right hon. and hon. Friends in a few weeks' time which will do both tricks.

Iain Wright: In my brief contribution, I want to focus on some broad macro-economic factors that the Chancellor mentioned in his Budget statement, and then to focus on matters, particularly the need for skills, that directly affect my constituents.
	The Chancellor was right to outline the global competition that Britain faces. Members on both sides of the House have mentioned China and India as having the potential to become major economic superpowers in the next few decades. Economic growth rates, year on year, of some 10 per cent. in India and China and their almost insatiable demand for raw materials will naturally have profound consequences for the UK economy. I am worried that that sustained burst of demand will increase the unit cost of raw materials throughout the globe and that that, in turn, will damage the robustness of the UK economy's ability to fend off inflation in the short to medium term.
	I am equally worried that the low wages offered in those countries will mean that British firms will not be able to compete. I have been told that workers in many parts of the Chinese economy are paid the equivalent of 75p a day. We cannot compete with that rate, and nor should we want to. The British economy should be concentrating on high-skilled, high-value, high-technology companies, not sweat-shop labour. I shall return to that point later.
	I am confident that the structural changes to the UK economy made in recent years will enable us to maintain this sustained period of economic stability. Several factors have produced that stability. First and foremost was the decision taken in the first few days of the Labour Administration in 1997 to make the Bank of England independent. I do not wish to make petty party political points, much as I am tempted to. For example, I was impressed that the right hon. and learned Member for Rushcliffe (Mr. Clarke), who is not in the Chamber, introduced inflation targets when he was Chancellor, although the Conservative party now appears to despise targets as a means of improving performance.
	I agreed with my hon. Friend the Member for Coventry, South (Mr. Cunningham) when he said that he approved of boring Budgets. I think that boring Budgets mean economic stability, so I would rather have them than exciting Budgets that reflect boom and bust and the stop-go economy of the 1980s and 1990s. That was my experience as I was growing up in my constituency. The Conservative Government of the 1980s decimated economic activity in Hartlepool and did that again in the early 1990s, so I would rather not have lessons in economic management and competence from the Conservative party. The fact remains that only a Labour Administration were bold enough to give the Bank of England independence, which was an important building block in helping to produce a stable and prudent economy.
	A second key factor that is often grossly overlooked is the decision taken in 1997 to repay a substantial amount of the national debt. The figures provided by the Chancellor in his "Financial Statement and Budget Report" last week were impressive. National debt has reduced from 44 per cent. of national income in 1997 to 34 per cent. today. Apparently we have repaid more debt in one year than the combined total of that repaid during the previous 50 years. Debt interest repayments now represent the lowest share of our national income than at any time since 1915.
	The fact that our debt repayments have been substantially lowered has meant that the Government have had the flexibility and added receipts to invest in schools and hospitals. Rather than wasting revenue on loan repayments and unemployment benefits, which is what happened in the 1980s, the Government have had the foresight and ability to spend money on our children's education, our health and law and order. Surely everyone can welcome that.
	These factors, among others, have meant that the Government have presided over historically astonishing economic stability and growth. The International Monetary Fund report on the UK economy this month has been cited in some quarters as evidence that all the good work done in recent years will slide into an abyss. After reading the report, however, I do not share that interpretation. I see a British economy that is remarkably robust enough to withstand the shocks and uncertainties that the wider global economy will almost certainly throw at it. As the report states:
	"The fiscal and monetary policy frameworks remain at the forefront of international best practice . . . The economy remains enviably"—
	I really like the word "enviably"—
	"well positioned to sustain steady and strong economic growth over the medium term".
	That does not appear to paint a picture of a Chancellor who has squandered prudence. Instead it shows that he has put in place and consolidated long-term prosperity and stability as the centrepiece of his economic policy.
	I have never delivered a speech in the Budget debate before, so I did a bit of research by looking at previous debates, especially those held in 1997 and 2001. When I read the speeches made by Conservative Members, I was struck by their almost universal mantra that we were about to embark on a road of economic doom and gloom and imminent recession. Since 1997, the Chancellor has consistently been able to make a mockery of such claims. I am sure that we will see with hindsight that the current claims made by Opposition Members about economic mismanagement will prove to be equally hollow.
	I sincerely believe that the future of the British economy is with state-of-the-art technological companies and a highly skilled work force producing high-value products and services, such as disease-eliminating drugs arising from biotechnological advances and environmentally friendly energy sources that can be exported to the rest of the world. That is why the emphasis on research and development and science in the Budget is crucial to the long-term health of the British economy. Equally, the removal of regulation for our companies is a welcome step, and the principle that our well-run firms will be subject to less audit and inspection will go a considerable way towards ensuring that success and compliance with regulations are rewarded with freedom and flexibility.
	The fact that added emphasis is being given to enterprise and entrepreneurialism is also welcome. We need to have at the forefront of Government thinking the ways and means of educating and nurturing a highly skilled work force with the capacity to produce world-beating ideas.
	By chance, on the day on which the Chancellor delivered his Budget statement, I met David Waddington, the incoming principal of Hartlepool college of further education. The college has been absolutely central in my constituency during recent years in raising aspirations and increasing the number of people in Hartlepool with qualifications. However, David expressed concern over a long-term trend of skilled and educated people leaving the town after receiving a qualification to take advantage of the vibrant economy in London and the south-east. The Hartlepool economy has come a long way in the past 10 years, but I fear that a brain drain will result in fewer opportunities for prosperity in the town, which in turn will create the risk of higher dependency on benefits. Hartlepool people do not want handouts, but the prospect of additional prosperity and stability.
	There is evidence that that is happening, but I want it to go further and happen faster. The number of business start-ups in the town has recently increased massively after being decimated by the recession in the early 1990s, but we need many more businesses in my town to provide more opportunities for wealth and employment creation. I urge the Chancellor to intervene, at least in the short term, to ensure that skills and qualifications obtained by Hartlepool people are rewarded with well-paid employment prospects and job opportunities in Hartlepool. We should continue to help businesses by putting in place the infrastructure necessary to compete with the rest of the country and the world, such as a direct, fast rail link to London and incentives for businesses to relocate to, or be established in, the town.
	Other measures in the Budget will greatly help my constituents. The doubling of the value at which stamp duty is paid should have a positive effect on the Hartlepool housing market, in which most properties fall within the £60,000 to £120,000 price range. That will enable more people in the town to own their own homes and move further up the property ladder. I am slightly concerned that the move will accelerate still further housing market failure in the centre of the town relating to terraced properties, but in general, and on balance, I think that the proposal will stimulate demand.
	It almost goes without saying that the extension of tax credits and help for pensioners will greatly assist hard-working families and older people in Hartlepool. The fact that the tax credits mean that a family with two children starts to pay income tax only on income above £21,200 will have a hugely positive effect on the majority—the absolute majority—of my constituents, because average earnings in Hartlepool remain below the national average.
	I found a hugely important statistical table in this week's edition of The Economist showing the effects of the Labour Government's Budgets between 1997 and 2004, especially on the income of the richest and poorest in our society. It showed that the net income of the poorest 20 per cent. had increased by some 8 per cent. over that period, while the richest 10 per cent. had experienced a relative fall in their net income of about 5 per cent. I believe passionately that such a redistributionist economic policy, which flattens economic and financial inequalities in our society while encouraging and rewarding enterprise, is exactly what a Labour Administration should be pursuing.

Desmond Swayne: I beg to differ. It is basically applied mathematics and the notion of a differential between economics and mathematicians is therefore difficult to sustain.
	However, my incredulity at the Chancellor's economics is not difficult to sustain—they mystify me completely. I am all at sea with them. He was at great pains to point out that we were in the 50th consecutive quarter of sustained economic growth—the longest such period of economic growth. He is right. If we use that measurement, it is the longest period of economic growth since the reign of Queen Anne. However, one has to count 18 quarters under a Conservative Government.
	I am concerned, at a time of such sustained economic growth, about the amount of borrowing in which we indulge—it is a worrying phenomenon. If we go back to the Budget of 1992, the prediction for borrowing this year was some £17 billion, and £18 billion for next year. Yet this week, the Chancellor told us that, for this year, the figure would be £32 billion, and £29 billion for next year. We are talking about a mind-boggling £150 billion to be borrowed in the next four years. Those figures no longer have any meaning for us; they are beyond our comprehension.
	Spending is rising at a faster rate than economic growth and the deficit keeps growing. There are places in the Palace of Westminster where one can have the benefit of Sky television and I am often Downstairs in the mornings when the television is on—

Desmond Swayne: The hon. Gentleman takes me back. However, in the light of his question, I shall not say where I did teach.
	Much of our determination to spend money is misplaced. So much is being borrowed, and so much could be better spent. I am confident that our propensity to find savings rather greater than the further £12 billion identified in the Government's Gershon report is entirely realisable. Our determination for Government expenditure to grow by 2 per cent. less than the Government would have it grow is also an entirely laudable and achievable objective.

Kelvin Hopkins: It is always a pleasure to follow the hon. Member for New Forest, West (Mr. Swayne), and I was greatly entertained by the last part of his speech in particular. I must be older than him, because, before electronic calculators came in, I used to use an electro-mechanical calculator, which was like a vast electric typewriter. The last time I saw one, it was in a glass case in the Science museum. I am clearly almost from the stone age.
	I would like to congratulate the Chancellor on a sensible Budget. I do not think that it will be remembered for very long, because Budgets are not. Harold Wilson memorably said that a week was a long time in politics, and I am afraid that Budgets, like everything else, are forgotten fairly quickly. What will not be forgotten, however, is the fact that we have had a strong economy for a remarkably long time and that, under the Chancellor, it has been managed extraordinarily well for the past eight years. We hope that it will continue in that vein for a long time to come. I might wish to debate some of the Budget's detail with my right hon. Friend the Chancellor—I would like to include some more radical measures than he would, for example—but his reputation will be unmatched by others who have gone before and, no doubt, by some who will follow.
	We have taken too much notice of the possibility of a deficit, and argued about what size a deficit might be. Any Opposition coming up to an election will naturally be alarmist about these things, but I do not believe that missing the objective of the golden rule by a few billion is a great tragedy in the history of economics. I would refer hon. Members to a fine book by J. K. Galbraith entitled "The World Economy since the Wars", which recorded that, in the second world war in particular, America borrowed like there was no tomorrow—it might have seemed as though there was no tomorrow—and finished up with the strongest economy that the world had ever known. Borrowing and having a deficit are not, of themselves, tragic. Indeed, with our gross borrowing at such an historically low level, there would not be a serious problem for the British economy even if the Chancellor broke his golden rule.
	If the Chancellor did break the golden rule, and if, after being re-elected, he chose to raise taxes on the better off, I personally would not object. I know that that is not in his mind, but I would not object at all to such a proposal. Indeed, it would be very sensible. In fact, I would go somewhat further in spending some of the largesse of the wealthy on providing better public services and better pensions for people who are less well off. However, that is my view and I recognise that it does not represent the Government's view. I am perhaps a bit more traditional in that regard. With views like these, it is unlikely that I shall ever be promoted to the Front Bench, but I like to say what I believe to be the truth.
	I should also like to congratulate the Bank of England on its management of monetary policy. I was sceptical about its independence, but it has been a success, not because of independence but because of the way in which it has managed monetary policy. I hope that I shall not upset too many people by saying that the Bank of England has managed monetary policy rather better than the Treasury would have done, because it has been more expansionist. I would guess that, by and large, it has set interest rates at about 0.5 per cent. lower than the Treasury would have done. The economy has therefore grown more quickly and demand has been sustained, which is a very good thing.

Kelvin Hopkins: As so often before, I agree entirely with my hon. Friend. In fact, he takes me to my next point, which is that, if the Bank of England had not managed monetary policy very well, the Government could take it back and manage it themselves. However, they would not be able to do that if we had made the mistake of joining the eurozone. I am glad to say that my right hon. Friend the Chancellor has steered us well clear of it for eight years, and I hope that he continues to do so.
	There is a danger of being a bit too cautious. We have had a symmetrical inflation target that was slightly higher than the asymmetrical inflation target on the continent of Europe, certainly in the first part of the eight years of this Labour Government. That has meant that we have been able to have a slightly more relaxed monetary policy. However, I believe that there is more scope for relaxing monetary policy—and keeping an eye open for opportunities to do so in the future—so as to ensure that demand does not fall.
	Sustaining consumer demand in the economy is fundamental to keeping employment high. When employment is high, tax revenues are high, benefit payments are lower, and the economy works well. That is the kind of economy that we had from the end of the second world war until the mistakes of the 1970s were made. We are now moving back in that direction, and I hope that my right hon. Friend the Chancellor will not press the Bank of England to be too cautious with monetary policy so as to cause the economy to deflate, or to make the terrible mistakes that have been made in the eurozone.
	I also want to say that the Tory comments about there being a black hole in Treasury accounts really are nonsense. Compared with the past—this point has been made by my noble Friends in the other place—our deficits and surpluses are negligible and of small account. Britain has a much stronger economy, with lower gross borrowing and gross debt than any other country in the developed world, and has been a tremendous economic success, perhaps in contrast with what went on in the 1980s.
	The important thing is to keep the economy buoyant, not to worry too much about 0.5 per cent. more inflation. Is that dangerous talk? I do not know, but 0.5 per cent. more inflation is far less important than maintaining high employment, high growth and high prosperity.
	It is another Tory myth that this country is highly taxed. That is just not true. The Organisation for Economic Co-operation and Development table shows that our tax burden, as it is called, is much lower than that in most of the most developed countries. The idea that low taxation is somehow essential for a successful economy is, again, complete nonsense. The two strongest economies, arguably, are Sweden and Norway, which have some of the highest taxation in the world. Indeed, Sweden is the highest taxed in the world, but it is competitive and prosperous with a strong welfare state. If I had to wish Britain to drive in any particular direction, it would be that of Sweden.
	Interestingly, at the last general election, Sweden's Conservative party chose to campaign on tax cuts and spending cuts. It was rejected by the electorate and that campaign helped the Social Democrats to get back into power. Indeed, the Swedish Conservative party has changed its policy: it is not campaigning for tax cuts or for spending cuts any more, because it knows that they are unpopular.
	So, Sweden is ahead of us. The difference between Swedish and British taxation is of the order of 15 per cent. of GDP, which is a staggering amount—more than £150 billion a year. I am not suggesting that we suddenly start to have Swedish levels of tax, but there is scope for a little more taxation—particularly for the rich, provided it is progressive—and for a little more spending on the things we think are important. Norway, compared with Britain, has an extra £90 billion of tax. The figures for Norway are quite a long way from those for Sweden, but it still has a strong economy.
	If one wants confirmation that the Norwegian economy is very strong, one should look at the Chancellor's booklet entitled "Long-term global economic challenges and opportunities for Europe", which was published with the Budget. Chart 2.9 on page 18 shows GDP per person employed against employment rates. The country furthest from the origin—in other words, the strongest economy on those measures—is Norway.
	Norway is not only outside the eurozone; it is not a member of the European Union. I am not suggesting that these things are necessarily related, but that is at least an interesting correlation and Norway is not tied into the deflation of the eurozone. The only point on which I agree with the hon. Member for Ruislip-Northwood (Mr. Wilkinson) is that we at least can choose our own economic policy in Britain—our Chancellor and the Bank of England are doing very well in that respect—and we do not have to submit to the mistaken policies of the European Central Bank and, indeed, the European Commission.
	The wisest decision of our Chancellor has been to keep us out of the eurozone, although he probably would not want to pursue that argument too strongly for fear of causing dissension among one or two colleagues. I do not mind saying that because I am a Back Bencher, and I know that one or two colleagues on the Back Benches take a similar view.
	The German economy, in contrast with that of Britain, is in serious trouble and has the highest unemployment since 1933, which is a significant date. The Germans are in a bind: they cannot devalue their currency because they are tied into the euro; they cannot reduce interest rates because they are set by the ECB; and they are being told constantly that they must tighten their fiscal policy as well, which is madness—it will drive them further into economic depression. We have all the advantages, being outside the eurozone, and let us not make the terrible mistakes that the Germans did not just in joining the eurozone, but in joining the euro at a high parity for their currency. They then had to raise interest rates as well.
	We have a strong economy, and I congratulate the Chancellor on his management of it so far. I would love him to be a little more adventurous and progressive in his taxation policies, but that is an argument for another day.
	I want to say a few things about education, which is ostensibly the subject of today's debate, rather than macro-economics. I have a profound interest in education. I was in education, like many members of my family, and I am a vice-chair of governors of Luton sixth-form college. Since being elected to the House, I have campaigned for the Government to recognise that there is a funding gap, which has not yet been closed, between sixth-form colleges and school sixth forms. Sixth-form colleges are not quite the same as further education colleges: they do not get external funding from business and they depend on public spending.
	It is not just unfair, but foolish, for us not to sustain sixth-form colleges. I believe that they are the geese that lay golden eggs in our education system. They have every possible advantage for sixth-form education, and I invite Members to come to Luton to see the sixth-form college. I am probably alone among Members in having two such colleges in my constituency, both of which got grade 1 in their inspection and have been given beacon status.
	Luton sixth-form college has a remarkable record of achievement, of which I am very proud, although I may say that I can take no credit for it, being merely a governor. However, those colleges have not been given the funding they require, and they could do a better job if they had it. Classes are sometimes too large and the teachers less well paid than in the schools. I am not suggesting that school teachers should be less well paid, but there should at least be parity for sixth-form colleges. They should have at least the same pay.
	I urge Ministers to press the Chancellor again to provide more funding for sixth-form colleges in particular to close the funding gap with school sixth forms. As I said in a debate last week, sixth-form colleges are so successful that, in urban areas in particular, some schools with sixth forms ought to pool their sixth forms to create new sixth-form colleges because they work so well.

Kelvin Hopkins: I do not know whether it would be wise to change the status of sixth-form colleges now, but there was a misunderstanding by Ministers when sixth-form colleges were pushed together with FE colleges. Ministers were not quite sure what sixth -form colleges were. Nor are they quite sure of that now, because there are so few sixth-form colleges and not every Member of Parliament has one in his area or knows quite what they do. All I can say is that if Members are interested in visiting Luton sixth-form college, they can do so at any time. The hon. Gentleman is right that sixth-form colleges have not been given the attention and support they deserve.
	I come to some good news, which is what the Government have done for primary education. That is where we have had our problems. For years, our party argued endlessly about secondary education and ignored primary, relatively speaking, yet it is in primary where basic reading and mathematical skills are learned. It is those that were failing: children were getting to secondary school and finding that they could not do mathematics and had poor literacy. They would fail from there onwards.
	The Government have made tremendous advances, however, in promoting primary education, particularly at nursery, infant and pre-school levels, the benefits of which we will see in future. We have a problem with that cohort of children and young people still going through education, who are possibly in their late teens, who suffered the worst of the starved education system 10 to 12 years ago. They missed out on what young children are getting now, and it is a shame that they cannot go back and take advantage of what is happening now. When that cohort has gone through—we will do our best to make sure that they get the adult education or whatever training that they need later—and the new cohort goes through the 14 to 19 system, we will see dramatic improvements, some of which are already taking place. In my constituency, four schools have been in special measures, and all four have been taken out of special measures, with new head teachers and tremendous resources put in. We have seen some stunning improvements, and I am delighted that they are now doing well.
	The big social divider in Britain has been education. Even in this place, one can see divisions of which we are all conscious, and that is much more the case in the street and in our towns and cities. Compared with many other developed countries, we have deep social divisions, which are essentially educational and cultural in a broad sense. We have tried institutional fixes to overcome those problems with education, and those have not worked. We are now starting to challenge where the problem lies.
	I used to teach A-levels in a further education college, and I remember middle-class students coming to do A-levels, and working-class students coming to do day release. The social division was so great that, even in a further education college, they sat on different sides of the refectory, regarding each other with suspicion and hostility. We used to do experiments by putting those people together in liberal studies classes, and the tensions and frictions were extraordinary. That was 30 years ago, and I hope that things have got better since, but we have a deeply divided society, which is reflected more in attitudes and education than in any other way. Even people who become comfortably off in material terms sometimes have the sense of not having achieved because of their educational level.

Peter Bottomley: I agree with the last part of the hon. Gentleman's speech, and enjoyed and was educated by a good part of the rest of it. The key point is the importance of primary and some middle school education. We have not got transfer to secondary schools right, and a lot of children go backwards in their first two or three terms at secondary school. May I make a plea to teachers that they try to ensure that a child entering secondary school has a more stable environment, rather than changing classroom and teacher virtually every 55 minutes? If one can embed a child in a new school, the chance of that child blossoming and continuing the kind of progress that they were making in senior years at middle or primary school will increase.
	I am glad that there has been a focus on education, but some of my remarks will not relate to that. I want to start with one or two technical details.
	First, on page 279 of the Red Book, on the definitions used in total managed expenditure, why is there a reference to the national lottery? It states:
	"National lottery expenditures relate to the distribution of the money received from the National Lottery for good causes."
	I thought that when the lottery was created, it was decided with bipartisan agreement that lottery money would not be taken from good causes and brought under central Government control. Although the current Government have made some changes, they ought to reverse that, and I look forward to a Chancellor saying that the good causes money will not come under Government control, that it will go back to the distribution boards, and that Government will be left out of it. I pay tribute to the lottery lady, my right hon. Friend the Member for South-West Surrey (Virginia Bottomley), for her part in trying to ensure that that did not happen under the previous Government, and I hope that it will not happen under the next one.
	The Treasury team has plenty of good economists and people who can draw graphs, as we see in the Red Book. Why do we not have in the Red Book what we have in the Library guide to economic indicators—graphs showing unemployment in 1992–93, with productivity and investment also charted? Were the Government willing to be fair with taxpayer's money and fair with electors, they would put in their publications the kind of graphs that people could show to a friend and say, "You tell us when this Chancellor came into office, if everything good has come from him." In fact, were we to show most of these graphs, without the dates on them, to an interested person, and were we to ask them to put in the dates on which they thought the present Chancellor had come into No. 11 Downing street—or half of it, given that the other half was taken by the Prime Minister—they would get the timings wrong. We have heard about the 18 quarters of improvement under the previous Conservative Government, and I have every reason to believe that as the Government changes at the next election, I hope—I will work for that—we will see the same kind of improvement, give or take the economic shocks that come.
	There has been some talk about the teaching of economics. We have heard from two of the best teachers of economics, and as probably one of the worst students of economics, I ought to acknowledge that my supervisor, Professor Sir James Mirlees, was awarded the Nobel prize, along with William Vickrey, who sadly died before he could collect the prize. William Vickrey had the rather good idea that in an auction the person who wins should pay the price put forward by the under-bidder. In terms of politics, that is indicated in the current Government saying that they would adopt the Conservative plans for public spending for the first two years, which is one of the foundations of the relative economic prosperity.
	However, I want to condemn the current Government, and perhaps the Chancellor, for allowing the apparent house price asset inflation, which might have been one of the causes of the economy growing slightly faster than people expected. It is an economic, financial and inter-generational disaster. That raising the stamp duty threshold to £120,000 gives virtually no benefit to people in many constituencies around the country demonstrates some of the impact of that inflation, of which I do not approve.
	I want to comment on the National Audit Office. First, I want to praise the clear writing of its publication, "Audit of Assumptions for Budget 2005", which has a conclusion and recommendation, a useful annexe 1, with details of the unemployment assumptions, showing how the Treasury depends on outside forecasters, and another page and a bit on the audit of assumptions. But why does a booklet costing £3.75—10 sides at 37.5p each—use 10 sides when it only needed three and half? The first side shows the picture of the old British Overseas Airways Corporation headquarters, which is where the National Audit Office is. We do not need that. The second tells us what the National Audit Office does. The third is a repeat of the front page without the picture. The fourth tells us that it has been prepared for the House of Commons. Then we have the three and a half sides that matter. The last side tells us that it was printed by the Stationery Office, the previous side tells us who was responsible for the layout and production and that it is printed on 50 per cent. recycled fibre, the side before that that it is printed in the UK, and the side before that is blank. May I ask Ministers to have a quiet word with those in the National Audit Office, and ask them to audit the way in which they prepare that publication? I think that £1.30, rather than £3.75, would have been quite sufficient.
	The Government are interested in education. This morning the Secretary of State was scheduled to speak at the launch of the TUC's academy. I was there at the time when she was supposed to be there, but I had to return for a meeting at the House of Commons. I assume that she arrived virtually on time, and made a good speech. I do support public and Government interest in what trade unions and others do for education.
	In that context, let me say that I wish the Government would review the decision by, I think, the Department for Education and Skills to cut the £52,000 grant to the Woodcraft Folk to nil. The Woodcraft Folk employ five people and provide activity for 9,000 young people. The Woodcraft Folk were started by the socialists. The Woodcraft Folk appear to have made the mistake of being against the Iraq war. If the Government are penalising them for being a peace movement when their activity for children is just as good as that of the Boys' Brigade, the Scouts, the Guides, the Sea Cadets, the music groups and the sports groups, I ask the Government to reverse their decision and allow the Woodcraft Folk to have the £52,000—which, I think, amounts to about 20 per cent. of their income.
	I have two detailed questions to ask. One, which affects a member of my extended family, relates to funding for low-budget films. It is understandable that the Government may want to cut some tax credits applying to high-budget films. I believe that they have extended the low-budget film tax concession for a year. Will they make plain—this is not a request from my relation; it is a point that interests me—whether that extension to, I think, March 2006 is designed to apply to films completed and delivered to the distributors by then, to films in the process of being edited, or to films whose funding has been committed by the sponsors?
	My second point also involves a member of my family. It concerns the change in the stamp duty concession for non-commercial buildings in deprived areas. Let us suppose—again, this is not a request; I am merely interested—that I had agreed to buy a property for a mixture of commercial and residential use. Let us suppose that I had signed the contract but had not completed. Would the building become liable to the new rate of stamp duty, or would the concession introduced a couple of years ago still apply? I do not expect Ministers necessarily to respond to my questions tonight—a letter will do—but they are detailed questions which I think deserve an answer.
	Having criticised the National Audit Office earlier, I now want to criticise the Government Chief Whip. During the Chancellor's Budget speech the Chief Whip, and for that matter the Prime Minister, listened with some attention—indeed, I would go so far as to say that they tried to assume expressions of admiration—but as soon as my right hon. and learned Friend the Leader of the Opposition began to speak, the Chief Whip embarked on a running commentary and the Chancellor and the Prime Minister started talking to each other. Perhaps they have not done much talking to each other for the past year, and this was their first opportunity to be side by side, but I disapprove—and so will the public—of the sight of two leading members of the Government deliberately, discourteously and continuously holding a conversation when they ought to be listening to a response from the Leader of the Opposition. I hope that, if the Chief Whip accepts my criticism, she will tell her senior colleagues to improve their behaviour when they are in opposition, and also tell them that they do not deserve to hold their current titles if they behave in such a way on the Floor of the House of Commons during a major set-piece debate.
	Let me now deal with some of the details of the Chancellor's speech. A number of Members have referred to the free local bus travel for retired people. The documents produced by the Treasury at the time of the Budget made no distinction, in terms of time, between the £200 for retired households on council tax and the free bus travel, but we now know that the council tax concession is for a year. Will Ministers tell us why none of the three or four references to that concession includes that information? Did they decide to make the concession apply for only one year after the papers had been published, or did they deliberately arrange it so that people would mislead themselves when they heard what the Chancellor had to say and read the newspapers?
	Can we assume that the bus travel concession will last for rather longer than a year? May we also know—others have asked this as well—why the Chancellor did not say that it related to off-peak travel? An awful lot of pensioners will find themselves in what is called the "twirly group". The bus driver, or conductor, tells them "You're too early." That certainly happens in London. I do not complain about it myself. I might be affected by it on occasion, but I walk to work. Nevertheless, I believe that Ministers should make plain in documentation what they are actually saying. They are clever enough to do that—or at least their advisers are clever enough to ask "Minister, do you really mean this to be off-peak only? If you do, why not say so?"
	Will all people over 60 be able to travel free on all local transport, or will they be able to do so only on transport in their own areas? I am not arguing either case; I merely ask the Government to make plain which will apply. I feel that when several million people are likely to be affected, documentation should make such things clear so that the next day, when they are reported in the newspapers, people know where they stand—or where they will sit, if there is room on the bus.
	Then there is local government finance. There are two ways in which people are being helped with council tax. One is the provision of emergency money for local authorities to ensure that council tax rises in this election year—assuming that there will be an election this year—are kept relatively low, not more than two or three times the inflation rate. The other is the provision of an extra £200 for pensioner households—which, as has been said, is not nearly as good a concession as what the Conservatives will offer at the election for the future. Incidentally, that is one of the few political promises made that involve no losers: either people are not affected, or they gain. It is a clever bit of public funding.
	What we have not had from the Government is any indication that they will provide a buoyant source of revenue for local authorities—district, borough, unitary and county councils. I would say to my party's Front Benchers that when we are in government, the first thing we should do is try to arrange all-party talks and discussions with the Association of Local Authorities to work out how the Chancellor can say to local government, "We will make sure that you have a share of some of the rising revenues, and will not have to depend on Government or parliamentary decisions affecting revenue support grant."

Peter Bottomley: Yes. Let me also say that Margaret Thatcher and the Conservatives could not have saved the country in 1979 if there had been many more than 11 Liberal Members of Parliament. The politics are very simple, as are the arguments about council tax. There were too many Labour Members of Parliament. If we ask when people last voted Liberal as an answer to any serious national problem, the generous answer is 1906. As for the Conservatives, we are at our best the national interest party—that is, part international, part national, part local. I shall be happy to debate the details of council tax for the next three weeks, if the election is going to happen when it is expected.
	I could say much more, but I want—as well as praising the schools in my constituency—the sixth-form college, the further and higher education colleges, Worthing and Northbrook colleges, and the high schools, middle schools and first schools—to say a little about general economics. Under this Government, the household saving ratio is less than 6 per cent., yet when the Conservatives were in government it was 9 or 10 per cent. Saving is even more important than people's assets rising simply because of house price inflation. I look forward to the day when a Chancellor will say, "I have been successful in encouraging people to save voluntarily and in increasing the savings ratio to 10 per cent. or more."
	I am not saying that we should strive for the levels achieved in Germany, but I do believe that we should get voluntary saving back to its previous level, because that is one way in which to encourage people to be self-reliant. Encouraging more people to be self-reliant not only provides economic benefits but enables us to give more help to those who need it. We cannot help everybody all the time; rather, we need to persuade more people to be more independent more often. That way, we can give generous help to people when they need it.

Andrew Love: I begin by saying how much I enjoyed the speech of the hon. Member for Worthing, West (Peter Bottomley), and I want to pay him a compliment, although he may not look on it in that way. If I had listened to his speech on the radio, I would have found it very difficult to decide which side of the political divide he is on; long may that continue. I should also like to endorse what he said about the Woodcraft Folk. As he rightly says, the Government should revisit that decision.
	Of course, being on the Labour side of the political divide, I greatly welcome the Budget, and for several reasons, the first of which is the promise that it holds out for a number of key groups in our society, including pensioners, savers, single parents—they have not been mentioned much today; indeed, they rarely get a mention—and first-time buyers, who have been referred to consistently throughout. Secondly, as Members of all parties have pointed out, and as it is important to stress, the Budget provides a modest fiscal tightening, which is characteristic of this Chancellor. It is a prudent Budget and stability is at its very centre. That is key to what we are trying to achieve, but we also want economic growth and to improve living standards for the people of this country.
	I want to address some of the criticisms that I have heard from the Opposition not just today but in the past few days' discussion of the Budget. Although it has been rather grudgingly admitted that the Budgets between 1997 and 2001 were good, it has been argued that, miraculously, those between 2001 and now were comprehensively bad. I want to examine the impact of all those Budgets on the real economy, because that is what affects our constituents. Employment has been much commented on today, and we should note that we have the highest employment rate on record. The current employment rate is nearly 75 per cent., which is one of the highest figures internationally. That is a major success story for this Chancellor and for the past eight Budgets. Of course, we also have the lowest unemployment rate for some 30 years.
	According to the new measure, inflation is running at 1.6 per cent., and it will drift up slowly to the target figure of 2 per cent. by 2006. Of course, the fact that that is the lowest figure for 30 years endorses the decision taken very early on by this Government to make the Bank of England independent. That decision has also resulted in the lowest interest rates for 35 years, from which this country's 18 million home owners have directly benefited.
	Growth—the usual measure of economic success—was 3.1 per cent. in 2004, despite the fact that almost every single independent forecaster predicted that it would be much lower. This year, the figure will be 3 to 3.5 per cent., and next year it will be 2.5 to 3 per cent. Each of those figures is above the economy's trend growth rate and better than other comparable European countries' growth rates. Indeed, our economy even grew during the international recession of 2001–02. Ours is therefore a record to compare with anyone's. The icing on the cake is the fact that living standards in this country since 1997 have improved by 50 per cent. on average. By anybody's judgment, that must be a record to be proud of.
	The Tories claim that all this is the result of the prudent measures implemented by former Conservative Chancellors; indeed, one Member even claimed his small share of the credit for the benign economy this afternoon. I am surprised that even the hon. Member for Twickenham (Dr. Cable)—he is not with us this afternoon—has not laid claim to some of the credit for the benefits that the economy has delivered. It is natural that the Tories would want to claim part of the glory, but they cannot then continually take great delight in telling us, "You've been in government for eight years. You have to accept responsibility for the decisions taken during that time." We do: we accept responsibility for the good economy, as is right and proper. It is also right and proper to point out that the mid-1990s—during which time two Conservative Chancellors introduced new policies—signalled the end of a very deep recession, so growth was almost certain to happen at that stage. The unique trick of this Chancellor and this Government in the past eight years has been to sustain growth, stability and improvement in the real economy. That has to be recognised.
	I share the view of my hon. Friend the Member for Luton, North (Mr. Hopkins) that there has been a lot of alarmist talk about the economy, and not just from the official Opposition but from both Opposition parties. They have taken great delight in highlighting the most pessimistic forecasts of the so-called independent forecasters, even though they have been consistently inferior to the Treasury's. There is also the myth of the so-called black hole, which, according to the Opposition, has existed for many years. However, it looks almost certain that when the current economic cycle comes to an end, the Chancellor will be easily meet his fiscal rules.
	The negative impact of increased interest rates has been focused on, yet it is clear that there is significant international confidence in the UK economy. Money continues to flow into our economy, perhaps partly because of the malaise in the eurozone and the difficulties currently experienced by Japan. The American economy is obviously doing well in attracting significant funding, but the UK economy continues to enjoy the confidence of the international community. There is no reason to think that that will change.
	What really stuck in the Opposition's craw was having to give credit to the Chancellor and the Treasury for the fact that their forecasts have continuously and significantly outperformed those of the so-called independent research bodies. Everyone, including the Chancellor, would have to accept that forecasting anything further than a year or two into the future is a very shaky business. Of course, we have annual Budgets and a pre-Budget statement in order to be able to take into account any difficulties that might emerge in the national or international economy, and that is what we would do, should those circumstances arise.
	I want now to congratulate the Chancellor for a number of the announcements in his Budget. He told us that the Gershon review, which will cut out waste and bureaucracy and redirect investment to the front line, has now started. According to the Budget statement, £2 billion has been saved through value-for-money studies and another £2 billion through improvements in procurement. Several posts have disappeared and are now being reallocated to front-line services. However, the Gershon review is predicated on the view that delivery at the front line should not be put at risk. That differs from the so-called James review, which Conservative Members mentioned. When Gershon was asked about the figures in the James review, he raised the question of whether it would be able to deliver on front-line services. I ask the same question again this evening: will it deliver?
	The other key question is where the £35 billion-worth of cuts will come from. We already know that the Tories are going to pinch the Gershon review's £21 billion or so savings and redirect them into front-line services, but that still leaves £14 billion unaccounted for. We know that the Conservatives—supposedly members of a party that proclaims itself a great supporter of small business—are prepared to cut the Small Business Service. They are also prepared to cut the new deal. We all know that they do not care about youth unemployment; frankly, they do not care about unemployment at all. As a former Tory Chancellor said, unemployment is a price well worth paying.
	Added to that £14 billion under the James review, the shadow Chancellor announced a further £35 billion-worth of cuts for the future. We have absolutely no idea where those cuts will come from. It was argued earlier that £11 billion or £12 billion was an enormous amount, so we should remember that £35 billion-worth of cuts, even if spread over a number of years, would have an enormous impact on our economy. If we do not find out where those cuts will fall, we shall have to assume that front-line services such as education and health will be affected.

Andrew Love: I certainly do, and the figure that was estimated then was considerably less than the current figure that the hon. Gentleman is trumpeting. It is interesting to note that, a month or two ago, the Opposition were announcing that they would reduce public expenditure, but they are now saying something quite different. I suspect that one of the Tory Front Benchers will disappear as we approach the general election.
	I also congratulate the Chancellor on staying within his fiscal rules. If we compare that with what has happened in Europe with the growth and stability pact, it shows how clearly the Chancellor has the confidence of the international community because he sets rules and stays within them. We have heard a lot in the past few days about the mythical so-called black hole, but the Chancellor's forecast in the Budget is that at the end of this economic cycle, under the golden rule, we shall be at least £6 billion in surplus. As to the sustainable investment rule, £57 billion will be the measure of his ability to sustain investment in the economy. Even with the private finance and other initiatives that do not appear on the Government's balance sheet—the Opposition continually talk about them, even though they are only 43 per cent. of overall PFI credits—the Chancellor still remains well within his sustainable investment rule.
	I also congratulate the Chancellor on reducing the burden of regulation. We have not heard much about that from the Opposition, despite the fact that it is one of their constant themes. However, we have heard from small business and other business organisations how welcome are the changes to the requirements for the reporting of VAT, which will significantly reduce the burdens that businesses face. The reduction in the number of regulatory bodies—we shall have to see how it pans out in the future—is also very welcome to the business community. Speaking as a member of the Regulatory Reform Committee, I accept that we have to change the culture in Whitehall and get it to think about reducing regulation as well as increasing it. Only when we have institutionalised that here at Westminster will we get the changes that we want.
	I want to comment on the household savings ratio. I was going to say that it had not been mentioned by any Conservative Member, but in fact the hon. Member for Worthing, West did mention it. He forgot to tell us, however, that all the Jeremiahs on his side had previously said that the savings ratio was too low; now that it is beginning to increase, they no longer mention it. I am pleased that it has risen to 5.6 per cent.
	Two proposals in the Budget have particular merit, but I would like to see the Chancellor going further with them in the next Budget. I welcome the significant investment—the education sector is relevant—going into public infrastructure. We have invested substantially in recent years, and it is pleasing to see that public investment will rise from 2 per cent. to 2.25 per cent. of gross domestic product in the next couple of years. Over the next few years, a brand new hospital will be built in the most deprived part of north London, which lies in my constituency, and a second hospital in my local authority area will also receive significant investment in new facilities. My constituents will be able to use both hospitals and receive a significantly improved service as a result.
	My constituency has also had two new schools—a secondary and a primary school—in recent years and there has been an enormous improvement in the facilities in all our primary and secondary schools. There is a proposal for a local academy and I look forward to it going ahead in the next couple of years. The Budget particularly highlighted the "Building Schools for the Future" initiative, which is an exciting prospect that should help to deliver a completely refurbished secondary sector and additional improvements to the primary sector. It amounts to £9.4 billion-worth of investment over the next five years, which will make a significant difference.
	The Budget statement predicts that by 2009–10 we will invest £6.7 billion in our schools, in comparison with £700 million in 1996–97. That provides a good measure of the investment that Labour is putting into our public infrastructure. All that will bring about higher standards, better results for our kids and real achievements for pupils who live in the more disadvantaged areas.

Andrew Love: I shall listen carefully to what the hon. Gentleman says about the £35 billion-worth of cuts that the shadow Chancellor wants to make. People tell me that the differences between us are in the rate of growth, but the reality for my constituents is that they will have a choice between the Labour Government and the official Opposition and the difference between the Government and the Opposition is £35 billion-worth of cuts in our public services. It is critical that we get that message across to the electorate, so I assure the hon. Gentleman and all his colleagues on the Opposition Benches that we shall indeed do our utmost to ensure that the message gets across to our constituents between now and whenever the general election is held.
	I take on board the hon. Gentleman's comments about the head teachers union. I understand that teachers have some difficulties, but I hope that they will continue to discuss the issue with the Government. It is an important initiative and it should be introduced. I am confident that the NAHT will be able to reach an agreement in the not-too-distant future.
	I want to touch briefly on some other issues. I was pleased that the Chancellor announced an increase in the inheritance tax limit to £300,000 in two years' time. A considerable number of my constituents are affected by the tax. I am sure that it was never the intention to include so many people in that regime, so I strongly welcome the change. We need more comprehensive reform, however, and I hope that after the general election is out of the way the Treasury will consider the matter more seriously. We must ensure that inheritance tax does not affect families with moderate incomes, but reaches only those who are well-off enough to sustain the burden it imposes.
	On council tax, I strongly welcome the £200 to be paid to every pensioner aged 65 or over. I say "every" advisedly, as that is an important consideration. Our opponents, both the Liberal Democrats and the Conservatives, have been telling everybody all the good things that they are going to do for pensioners, but the official Opposition forgot to say that everyone in the household has to be over 65 to receive the benefits they are offering. That proposal falls adversely on the less well-off. The Conservatives would pay more to the well-off and less to the less well-off. Our proposal would reach more pensioners and provide more support to the poorest pensioners, which is important.
	The Liberal Democrats forgot to tell better-off pensioners that their income tax proposals will have an impact on them. If the Liberal Democrats were more honest about the impact of their so-called local income tax, they might recognise the merit of what we have been saying: our proposals will improve the situation for more pensioners.

Angela Watkinson: I thank the hon. Gentleman for that. I agree absolutely; the repayments are often unmanageable. It is galling for people to be told by the Inland Revenue, "Yes, it is our fault, but it is your fault for not knowing that it is our fault." I ask the Minister to bring pressure to bear not only to simplify the system but to overcome that basic problem.
	A Conservative Government will allocate more funding to early-years partnerships with parents, Sure Start programmes and the national parenting fund, to support parenting programmes provided by the voluntary and community sectors. In addition, local authorities will be refunded for all VAT incurred in the provision of welfare services such as child care and children's centres.
	I believe passionately that if we get early years right, the long-term benefits will be felt throughout the education system. If every child who enters primary school is self-confident, socially well adjusted and ready to learn, the job of their teachers will be so much easier. Teachers will be able to concentrate on teaching. Of course children will have differing ability levels, but they will all have the opportunity to develop to their individual full potential. The knock-on benefit of successful primary education would then be felt in the secondary sector with, I predict, fewer disruptive or disaffected teenagers and the consequential early retirement of demoralised teachers.
	I was speaking recently to some experienced long-serving teachers who are planning to take early retirement not because they are fed up with the job but because they are unable to maintain discipline in the school. One teacher of senior boys said, "Some of these boys are bigger than me and they have attitude, and I am not even allowed to adopt what is described as an aggressive stance towards them—and they know it." That simply has to stop. The awful thing was that he added that a lot of his colleagues were also planning to retire. That large school will see an exodus of experienced staff and therefore an influx of less experienced staff, who will not have more experienced teachers as mentors and role models. That could have a serious effect on the overall management and on attainment levels in the school.
	Getting early years right is not a panacea—life is more complicated than that. The education system cannot make up for all the problems that a child might have, but it can make a major impact. Early years must not drop down the list of priorities to make room for after-school clubs and holiday care. I hope that the Minister will take up that point specifically in his summing up.

Mark Hoban: My hon. Friend is absolutely right. In reality, there is no substitute for choice in terms of delivering the service that people want. If they are able to choose their child's school or the hospital in which to have their operation, services will be tailored to match their needs. Too often, involvement in boards and other forms of governance is seen as a substitute for real choice in our public services. Placing too much emphasis on that puts us in danger of taking away the most simple mechanisms for people to ensure that their wishes can be heard, their views expressed and their voices listened to directly by organisations instead of having them ignored or ridden over roughshod by public bodies and by the Government.
	This Government have been a tremendous example of the way in which services can be run on the basis of a single sense of direction that is determined from Whitehall, not at a local level. As a result, priorities are not set in our local communities. Parents do not have the choice of schools that they believe that they should, but are forced to choose from a very narrow range with their choices restricted by a Government who have a clear sense that what they believe is right. That arrogance of centralised direction and control has absorbed much of the money that they have raised from taxpayers. The "Government knows best" approach stifles much of what is done well in our public services. In recent weeks, I have talked to teachers who feel as though they have become de-professionalised—that there is so much that they are told to do by central Government that they are moving away from being professionals towards being technicians. Many in the public sector worry that they are losing their autonomy and sense of decision making as individuals because of the way in which the Government, through public service agreements, targets, monitoring and control, have sought to remove some of their discretion and independence in improving public services.
	If we strip out much of the bureaucracy in Government, we can afford to spend more on our front-line services. We can ensure that our doctors, nurses and teachers—all those in the front line—have the opportunity to mould services in the interests of the people who use their hospitals and schools and want safer streets. If we strip away that bureaucracy and centralised direction, we will have an opportunity to develop a pattern of provision that meets local needs and responds to what is happening on the ground instead of whatever is the current priority in Whitehall. That will allow resources to be spent where it matters and drive the improvement in our public services that so many people are waiting for.
	Our approach to public services distinguishes us from Labour. We will give power to professionals and choice to patients and parents. Our commitment to that is in stark contrast to a Government who suddenly, a few weeks before the election, find out that people are fed up with a fat and bloated Government and try to amend the centralising agenda that has demoralised our professionals and angered our constituents, who cannot see where their taxes have gone. If we are to ensure that the planned additional spending on health and education is spent well, we need to give professionals freedom, give parents and patients choice, and above all give taxpayers value for money.

John Healey: Is that the same James report that double counts the £21 billion that we have already set aside and plan to reinvest under the Gershon review? Is that the same James report that claims that more than £600 million can be saved by abolishing the strategic health authorities, when the cost of running the SHAs is only £130 million? Is that the same James report that claims that £100 million a year can be saved by privatising the driver, vehicle and operator group test, when that was privatised by the Tories in 1996? Instead of adding to, that undermines the credibility of the shadow Chancellor and a future Tory Government.
	Let us be clear. The shadow Chancellor has said:
	"Our plans provide the ability over a six-year period for us to be spending about £35 billion less per year in the sixth year than Gordon Brown's plans provide for".
	That means year-on-year cuts in spending plans from year one. Based on the shadow Chancellor's own figures, under his plans there would be £7.5 billion in cuts next year; £13 billion in cuts the following year; £16 billion the year after; £22 billion the year after; £27.5 billion the year after; before reaching £35 billion after six years. That is the reality of what this country would face if we get a Tory Government committed to that sort of scale of cuts.
	Instead, the Budget is built on the strength and stability in the economy. It strikes the right balance between tax cuts that are affordable, investment that is essential and stability that is paramount throughout. It is not a give-away Budget—in fact, there is a marginal tightening of the public finances, as several hon. Members have recognised in their speeches—but it is a pre-election Budget: it sets out the choice facing people if and when the Prime Minister calls an election.
	People have a choice to consider: the track record, priorities and experience of 18 years under the Conservatives and eight years with Labour. A period under the Conservatives when inflation was 6 per cent. on average; a period with Labour when it has averaged 2.4 per cent. A period under the Tories when interest rates averaged 10.5 per cent., and with Labour less than half of that. A period under the Tories when mortgage rates for families averaged 11.5 per cent., or a period with Labour when they have averaged 6.1 per cent. for eight years.
	Since 1997, while 2 million children and almost 2 million pensioners have been lifted out of the condemnation of living in absolutely poverty, we have seen living standards rise, on average, by 3 per cent. each year, and Britain today has the best combination of low inflation, high employment and rising living standards for a generation. There will be a choice at the next election: a choice of Labour with more help for pensioners, children and working families, with most help targeted on those who need it most; or the Tory party, with a threat to tax credits and the pension credit. We know from the past that the Tories leave poor, low and middle income families worse off.
	The choice is a Labour party and Labour Government who will continue to invest in essential public services and to meet the long-term economic challenges that Britain faces, or a Tory party that is pledged to spend less in each and every year and to cut £35 billion from the public spending plans and from the investment that we need for our economic future. The choice is a Labour Government who, for eight years, have run the economy to provide 2 million more jobs in Britain, 300,000 more businesses, 150,000 more self-employed people and 1.5 million more home owners; or a Tory party that is pledged to make the same short-term decisions and the same mistakes with the economy as they made before. The Tory party risks returning Britain to the stop-go economy that we saw before—the stop-go economy that brought to British families higher mortgages, higher inflation and higher unemployment. I end, as did the hon. Member for Rayleigh, by quoting his leader: "Bring it on."
	It being Ten o'clock, the debate stood adjourned.
	Debate to be resumed tomorrow.